CBOT corn price crosses $5/bushel, highest since May 2014

New Delhi — The March futures contract of corn on CBOT breached $5/bushel, the highest since May 2014, on speculation Brazil may need to import from the US.

Corn was 1% higher in early Jan. 6 trading after touching $5.03/bu.

The rally was supported by "thoughts Brazil may import US corn if Argentina withholds its inventory from the global market," AgriVisor, a US-based agricultural advisory firm, said in a note.

Argentina recently suspended corn exports until the country's new crop campaign formally starts on March 1, to ensure enough domestic supply during the summer months, its agriculture ministry said in a statement on Dec. 30.

"This decision is based on the need to ensure the supply of grain for the sectors that use it as a raw material in their transformation processes," the ministry said.

Argentina is the world's third-largest exporter of corn.

Commodity agencies in Argentina forecast corn production in the country will fall to 47-48 million mt in 2020-21 from 51.5 million mt in 2019-20, due to insufficient rain.

Corn supply in Brazil, the second-largest exporter, is also expected to be tight through the first half of 2021 as the country's stocks are low and most available supply has already been exported.

The first corn production in Brazil is seen falling in 2020-21 due to dry weather in southern regions of the country.

The market shrugged off improved weather outlooks for South America as the precipitation may be too late to benefit crops in many areas, AgriVisor said.