U.S. Corn Hits Three-Year High on Concerns About Yields, Black Sea

By Kirk Maltais

Corn prices rose to their highest level since July 2023, making it more likely farmers will turn a profit on their crops for the first time in three years.

High heat in western U.S. growing areas, along with excessive rain in the east, has lowered expectations for crop yields across the corn belt. Forecasts from the Agriculture Department and last week's Pro Farmer Midwest Crop Tour show larger cuts to yields than previously expected. At the same time, continued Russian attacks on corn-carrying ships in Black Sea is putting further pressure on global corn supplies.

Corn futures on the Chicago Board of Trade topped $5.21 a bushel Monday, up around 24% since the start of July, according to LSEG data. Above $5 is typically seen as 'break-even' for most corn farmers, meaning that the cost of planting and farming won't exceed the revenue made from selling the harvest.

After rising above $5-a-bushel for the first time in 18 months last week, a deterioration in the Black Sea situation gave corn contracts a further boost over the weekend. Russia refused a truce that would halt attacks against ships carrying grains through the Black Sea, Ukrainian President Volodymyr Zelenskyy said Saturday, dimming hopes of a recovery in grain exports from the region.

Higher commodity prices hinge on how much this summer's weather impacted yields. Crop scouts on the Pro Farmer Midwest Crop Tour encountered many areas where unrelenting July heat has struck, following excessive rain in June for many areas.

Scouts posted pictures on X.com--formerly Twitter--showing corn ears deformed due to pollination issues, as well as tip back--aborted kernels located on the top of a corn ear. These issues can be found in any field in any given year, but a lot of instances of such defects signal that this year's corn crop can't match the all-time record size of last year.

"The big expectations are not being met by this year's corn crop," said Chip Flory, leader of the western leg of Pro Farmer's Crop Tour, during an evening meeting held last week.

Following its survey of farmland spanning seven states in the Corn Belt, Pro Farmer said it forecasts corn production at 15.34 billion bushels and soybean output of 4.57 billion bushels. For corn that would be a decline of roughly 700 million bushels from the USDA's outlook published in its WASDE report earlier this month.

The USDA reduced its outlook for 2026 corn yields by 2.3 bushels an acre to 180.7 bpa in its monthly WASDE report. It is a larger decrease than analysts expected, although if the number holds it will still be the second-largest U.S. corn yield on record.

July was the hottest month ever recorded in the contiguous U.S., dating back to when the National Oceanic and Atmospheric Administration began keeping records 132 years ago. It is also a key month in the corn life-cycle, as it is when spring-planted corn begins the pollination and silking stages of their growth, directly preceding the development of kernels.

"The hot and dry weather we saw during pollination is the issue," said Joe Davis, director of commodity sales for Futures International.

Outside of crop health, corn futures are also supported by the continuing conflicts in the Black Sea and the Middle East, which are snarling an increasing amount of grain exports and creating a situation where many countries struggle to obtain all of their usual supply.

In the Black Sea, bombings of key Russian ports like Novorossiysk are limiting the ability of Russian exporters to ship grains. Shipments from Ukraine are also compromised from damage from drone strikes.

"This rally is based on supply issues," said Stephen Nicholson, North America's head of crop research with RaboResearch, an arm of RaboBank. Nicholson adds that historically, rallies that are based on "supply shocks" tend to sputter out and reverse within weeks.

But there is reason to believe that this rally might stick. Severe weather is expected to continue into the fall and winter, presenting complications for farmers ahead of the start of harvesting in October.

That's because the likelihood of a "super" El Niño weather event has grown. The National Weather Service calls for a 69% chance "of a historic event that would exceed the strength of previous El Niño events dating back to 1950" between October and December - right when most American farmers hit their fields for harvesting.

What the market really hopes for is higher demand for U.S. corn exports abroad and a growing renewable fuels industry domestically. These two sources of demand could support higher corn prices for longer.

"A demand-led rally has a longer-term impact than a supply shock sort of thing," said Nicholson.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

August 24, 2026 08:18 ET (12:18 GMT)