Persistent dryness across many of the primary corn growing regions of Brazil is continuing to stress late drilled corn crops and impact their yield potential. In April, the estimate from the United States Department of Agriculture (USDA) for the Brazilian corn crop was at 109 million tonnes, but analysts see the lack of rain taking at least nine million tonnes from that crop potential. If the dryness continues, there are concerns that the crop could fall to as little as 90 million tonnes. These significant losses amidst increasing Chinese buying will push additional demand to US supplies, with the US exportable surplus already sold out. This has encouraged increased speculative buying and seen Chicago Board of Trade (CBOT) corn futures rise by over 40% since the end of March. CBOT corn futures have risen to their highest level in eight years and for the first time since July 2013, the near contract position has overtaken wheat.

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