Climate and Black Sea exports support EU corn

The European climate continues to be a factor of concern for grain markets globally, with droughts and high temperatures defining several striking numbers in relevant producing countries - including France, the main producer of corn and wheat in the European Union -, assesses hEDGEpoint Global Markets, a company specializing in risk management and commodity hedging, in a report released this week.

“As a result, the USDA cut corn supply in the bloc by around eight million tons in the July estimate, with a reduction in both yields and harvested area,” notes Grains and Macroeconomics analyst Alef Dias. “Even with the estimated increase in Ukrainian production, logistical difficulties are a major impediment for the Black Sea to cover the drop in European production,” he adds.

Therefore, there are bullish fundamentals for corn, especially European corn, to accumulate: the challenging climate in the EU, lower yields in the American market and logistical difficulties in the Black Sea, according to the expert.