The price of corn soared to its highest value in nearly two-and-a-half years on Thursday amidst the U.S. government reducing domestic inventory forecasts, which constricted food supplies around the world, Bloomberg reports. Inclement weather continued cutting into harvests.
March-delivery corn futures increased 1.7 percent to $6.42 per bushel on the Chicago Board of trade. In July 2008, corn futures raced to $7.9925 per bushel.
Stockpiles of the commodity in the U.S. will be "extraordinarily tight," according to a Thursday report by Luke Mathews, a commodity strategist at Commonwealth Bank of Australia. "Those tight stocks prompted record U.S. corn prices a few seasons ago."
The Agriculture Department slashed estimates of the U.S.' corn harvest by stating there will be a global production deficit of 20.1 million metric tons. Many crop-producing nations of South America are suffering from drought conditions as a result of a weather phenomenon.
La Niña "looms as a major risk to send world soybean stocks-to-use ratios to multi-year lows and prices to record highs," according to a note from Rabobank analysts Luke Chandler, Keith Flury and Erin FitzPatrick. "Lower-than-expected production in South America would increase demand for U.S. soybean exports."
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