(Bloomberg) — Corn prices in Chicago sank to a seven-week low as broken grain elevators and power outages in the U.S.’s busiest agricultural port raised concerns about grain supplies with nowhere to go.
Hurricane Ida left more than 1 million homes and businesses without electricity in southern Louisiana and also shuttered export terminals in New Orleans. Food supply chains were already under severe pressure amid the pandemic, with shortages of everything from packaging to truck drivers.
The U.S. is the world’s biggest corn supplier and about two-thirds of its grain and soy exports exit through ports surrounding the southern metropolis. If disruptions linger, it could cause a supply glut just as growers in the Midwest Corn Belt start harvesting crops.
“Boats, barges, fleets are a mess and will take some time to get any flow back running,” Advance Trading Inc.’s Drew Moore said in a Farm Progress post Tuesday.
The biggest U.S. farm cooperative, CHS Inc., said it will divert vessels from a shuttered Louisiana terminal through September, and that power may not be restored for as long as four weeks.
December corn futures in Chicago dropped as much as 3.2% to $5.2525 a bushel, the lowest since mid-July. November soybeans also fell.
Weekly crop ratings from the U.S. government on Monday showed that soy and corn conditions held steady from the prior week.
Both commodities are on track to end August with a fourth straight month of losses amid an uncertain demand outlook and an ease in weather-driven supply concerns. That’s the longest such streak in a year for corn and since 2014 for soy.
Wheat futures in Chicago fluctuated. Soybean oil fell for a second day, pulling back as much as 3.4%.
Elsewhere, Canada, the world’s biggest canola grower, expects to harvest its smallest crop of the oilseed in nine years after heat and drought slashed yields. Its wheat output could reach a 14-year low.
Canola futures in the U.S. fell a fourth consecutive day, dropping as much as 1.3%.
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