Corn, Soy Slump to Lowest Since 2020 as Storm Beryl Brings Rains

(Bloomberg) — Grain prices have slumped to the lowest level since the pandemic as Tropical Storm Beryl is expected to bring rains to the Midwest, potentially aiding yields at a critical time for crop development

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The Bloomberg Grains Subindex, which tracks futures for corn, soybeans and wheat in Chicago and Kansas, extended this year’s losses to 17%, trading at the lowest level since December 2020. That’s the worst performance among main commodity groups, with energy and metals indexes rising in 2024.

It’s a stark reversal from the post-pandemic rally that sent grain prices more than doubling through 2022, fueling food inflation across the globe. The surge, which had been driven by crop losses and the disruptions caused by the war in Ukraine, has since faded amid a rebound in production and slower demand growth including from China. The trend for more comfortable supplies is seen continuing, with US farmers currently on course for a bumper harvest this year.

Corn and soybean crops in the US are in their best shape in four years at this time of the season, according to latest data by the US Department of Agriculture. Conditions are expected to remain mostly favorable for the next several days, with Beryl — which pounded Texas as a hurricane Monday morning — expected to bring rains to the central and eastern Midwest this week.

“Favorable row crop weather provided the recipe for widespread selling in the grain and oilseed markets, with few buyers jumping in to slow the momentum at this point,” Arlan Suderman, chief commodities economist at StoneX Financial Inc., said in a note to clients.

Futures of corn for December delivery slumped as much as 4.3% to $4.0575 a bushel. Soybeans for November dropped as much as 3.1% to $10.9425 a bushel. Both commodities traded at the lowest level since November 2020.

Crop prices have also been pressured by sluggish global demand. US exports have been lagging behind, with importers in top commodities buyer China opting for purchases in rival Brazil, where a weaker currency is boosting soybean sales. Meanwhile, American corn growers are holding the largest stockpiles of the grain on their farms since 1988, thanks to high production costs and low prices.