Drought and Geopolitical Risks Push Corn Prices to Record Highs
· Dünya Gazetesi
Corn prices traded on the Chicago Mercantile Exchange surged to a three-year high of $5.2425, driven by drought conditions attributed to El Nino and geopolitical shipping crises.
Sharp Upward Trend in Global Markets
Agricultural commodity prices in global markets have entered a sharp upward trend. According to data from the Chicago Mercantile Exchange, the price of corn per bushel rose to $5.2425, a three-year peak, due to drought conditions brought on by the El Nino weather event and geopolitical risks stemming from the Russia-Ukraine war. Concerns over crop yields in the US, increasing expectations of a supply contraction, and rising corn exports from the country were the main factors triggering the market climb.
Market Data and Price Increases
The price of corn traded on the exchange had previously tested the $5.2450 level on July 31, 2023. The bushel price, showing an increase of over 11% compared to the end of July, has gained more than 17% compared to the closing price on December 31, 2025. Following these sharp price movements, trading on the Chicago Mercantile Exchange entered a stabilization phase around the $5.18 level.
Drought and Geopolitical Shipping Crises
Lower-than-expected corn harvests in the US Midwest have increased supply pressure. Adverse weather conditions in Europe and heatwaves in the US corn belt have reduced yields. Tensions on the shipping routes between Russia and Ukraine in the Black Sea line have disrupted grain shipments. With the addition of high energy and fertilizer costs, it has become difficult to balance global agricultural supply shocks.
El Nino Impact and Yield Losses
Evaluating the effects of climate conditions on global production, Futures and Commodity Markets Expert Zafer Ergezen stated:
"We are seeing serious effects of this in West Africa again. When we look at this framework, there were concerns about a decrease in corn yields, particularly in Brazil, the US, and Southeast Asia. We thought there might be declines in corn production originating from Brazil and corn yields originating from the US due to the El Nino effect. These predictions of decreases in production and yield have started to materialize."
Energy Costs and Price Expectations
Stating that approximately 60% of the corn produced globally is used in industrial applications, Futures and Commodity Markets Expert Zafer Ergezen noted that high oil prices are triggering demand for biodiesel. Evaluating the future of the markets, Zafer Ergezen said:
"The El Nino effect is expected to continue until the beginning of next year, which is almost a certainty. If oil prices continue to remain at these levels, all of this indicates that we could see upward price movements in corn. Prices will at least continue to remain strong. As long as oil prices do not retreat and there isn't a quick and lasting agreement between the US and Iran, I do not expect a very sharp and deep pullback in corn."