Better weather, but too late for U.S. corn crop
By Sam Nelson | Reuters – Fri, Aug 10, 2012 9:56 AM EDT
CHICAGO (Reuters) - Wetter, cooler weather was moving into the drought-stricken U.S. crop belt on Friday, and while the change comes too late to benefit the devastated corn crop, it may give some solace to soy.As the worst drought in over a half century took its toll, investors went on a buying spree, boosting corn prices by more than 50 percent from late May to fresh record highs above $8 per bushel. The U.S. government on Friday released fresh crop data that revealed shocking cuts for this year's grain and oilseed output as the drought spread through America's breadbasket.
The better crop weather was expected in the U.S. Midwest on Friday and through next week, which will help some late-planted soybeans, but it's too late for corn, an agricultural meteorologist said.
"We're looking at a much-improved forecast compared with what we've had all summer; not perfect but better," said John Dee, meteorologist for Global Weather Monitoring.
Dee said an inch or more of rain fell overnight Thursday in Indiana and Ohio, and more rain is expected in much of Ohio on Friday. "We've seen some decent rains in much of the Midwest. Central Illinois missed out, but elsewhere there has been some rain," he said.
Light showers in the range of 0.25 inch to 0.75 inch can be expected Sunday and Monday and again at mid-week in much of the Midwest, and temperatures will be below seasonal average. The highs will range in the upper 70s (degrees Fahrenheit) in the north and mid-to upper 80s F in the south, according to Dee.
"Soybeans will probably see some response but not corn. Expecting to see a huge response would not be possible at this point," he said.
Commodity Weather Group (CWG) on Friday said the driest areas now encompass one-third of the Midwest and include central Illinois, parts of eastern and southwestern Iowa, central and northeastern Missouri, Kansas, east-central Nebraska and northeastern South Dakota.
"Up to a third of the Midwest will probably remain unfavorably dry, despite some relief in South Dakota and the southern Midwest," said CWG meteorologist Joel Widenor.
The U.S. Department of Agriculture (USDA) on Friday released a shocking report showing just how bad the corn and soybean crops have been hurt during the historic drought that some were beginning to compare with the dust bowl days of the 1930's.
USDA said this year's corn crop would fall below 11.0 billion bushels for the first time since 2006 and soybean production would drop to 2.7 billion, a five-year low.
Analysts and crop experts said further cuts may be seen in future reports.
"These numbers are pretty bullish, what else can you say? There's room for these corn numbers to come down more. For those of us who have been in the field, the crop numbers are likely to fall further," sand Dan Basse, president of AgResource Co.
Basse said the biggest surprise was the government's sharp cut in soybean production.
"This is the lowest soybean production we've seen since 2007 by a nudge. It's going to be hard to figure out how to ration it all."
Domestic corn inventories could fall to a 17-year low next summer following this year's harvest, and soybean supplies could drop to their lowest level in 32 years.
"Global corn supplies are tight but not to the extent of soybeans. The soybean situation may take two growing cycles to straighten out. We may see stout soybean prices well into next spring," said Sterling Smith, commodities strategist for Citigroup.
Soybean conditions began to stabilize last week on improved weather in a broad swath of the Midwest, while corn conditions declined again. Still, the ratings for both remained the worst since 1988.
In the past week, extreme drought doubled its grip on the top corn and soybean producing state of Iowa, according to a report by a consortium of climate experts issued on Thursday.
The area under extreme drought in Iowa rose dramatically to 69.14 percent of the state from 30.74 percent a week ago.
Drought expanded in other important farm states over the last week as well, to 94 percent of Missouri and more than 81 percent of Illinois for at least extreme drought.
"Every day we go without significant rain ... is tightening the noose," said Mark Svoboda, a climatologist with the University of Nebraska's National Drought Mitigation Center.
(Reporting By Sam Nelson; Additional reporting by Carey Gillam in Kansas City;Editing by Sofina Mirza-Reid)@yahoonews on Twitter, become a fan on Facebook
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Supream1
People here is why gasoline prices are high depending on your state it can cost as much as 40-60 cent in taxes now add pipeline fee delivery charges and profit Now Also under stand oil Company make about 8-12 % profit So to make 20billion a yr profit they spend about 250 billion ..
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Bender •
Despite the drought, this will be the 8th largest corn crop in history. The UN has stated that the corn should be used for food, or feed, not ethanol. Just this once I agree with them. The ethanol subsidy benefits no one but corporate farmers. Nothing against you farmers, but ethanol is destructive to engines, and you have to burn more of it to achieve the same result. It increases the cost of fuel, and forces you to burn more of it. END THE ETHANOL SUDSIDIES.
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Ingersol
The reason this will be the 8th biggest corn crop of all time is because we are planting more than ever before. So yes it will be a disaster.
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A Yahoo! User
More ethanol means less foreign oil
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A Yahoo! User
Gm corn can be used just like any other corn. When corn is used for ethanol 70 percent is left which makes cattle feed. Also gm crops have made it possible to raise much bigger crops so we can have food and fuel
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Dennis • Fort Myers, Florida •
Beef prices up, cereal prices up, fuel prices up, yet the Fed tells us inflation is only 2% , what a lie that is
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Dudley Dooright
@Idahoser Show me a DiMoKkkRat who believes the truth when they're slapped in the face by it? No, Not One!
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Oberleutnant von Genschle ...
Actually, Billy Clinton was the first one to start re-calculating the inflation numbers using "heuristics" and "core inflation", to make the budget appear "balanced" (when you include the record Boomer payments to SS, which is supposed to be held in trust).
Even with that manipulation, the dollar has lost 95% of its value (and still losing) since 1913.
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big dog • Little Rock, Arkansas •
time to quit selling our crops to foreign countries as discounted prices. American subsidy $ should not feed those who hate us while we pay premium prices.
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M
How about paying farmers to grow food instead of not grow food. Our government pays people to not plant crops this is so stupid.
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George
Were burning Mexico's food, much of the American diet is wheat based. Still, it is stupid. The Environazi's would rather we did it, tho, since they hate humans anyway.
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Porkchop
Chinaand India have intentioally tried to start epidemics and sooner or later they will succede
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BoBuck
@tim...don't even know what you are trying to say, but you just seem like the type that needs a good thumbing down with your whiny post..don't worry about thumbs up or down..just say what the (ph)uck you want
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account12935 • New York, New York •
Guess anything with high fructose corn syrup is gonna go up in price, and with US thats about everything.
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Brad •
For the record, ethanol is neither a sustainable nor an affordable source of fuel. It costs as much (sometimes more) to process as crude... If this effects the cost of fuel it is because we are being duped!
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gadfly05 •
This wouldn't be a big deal if the federal government didn't mandate using 4.5 billion bushels yearly to make energy inefficient ethanol to adulterate gasoline making crappy fuel to "save" the planet" from "evil" petroleum.
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topper • Walden, New York •
Food prices are going up and up already, and the foods you are buying that contain corn oil or a corn bi product was made with last years crop. We are getting riptoff at the store now. Because of the drought. why.????????????????????
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James •
Sooooo...Has the United Stated curtailed exports of our drought stricken crops to save what we can get this year, without prices skyrocketing? I dought it.....
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Dudley Dooright •
Only Id10t's use corn to make Ethanol considering the fact it takes a gallon of oil/gas to produce 1.33 gallons of Ethanol. How's that economical? This is the stupidest idea ever to use corn for fuel when corn is needed for food.
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Eagle •
The UN yesterday said there concerned about the loss of crops here in the U.S....Why? We hand out over 50% of what we grow to feed the world, we need to lower our food prices first, then whats left over we can have other countries come here and pick it up,instead of spending billions shipping to countries that kill our soldiers!
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abc • Fort Worth, Texas •
Good opportunity to quit making ethanol from corn. All it does is ruin small motors. The cost to make ethanol makes it not net out as a good business decision. Stop the subsidy to ethanol.
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Clyde • Berlin, Connecticut •
Drought and floods have been common since the world began. The wise prepare for these conditions, the corporations use it to raise their prices.
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JimiJack •
The drought took a toll on Mississippi corn crops too... I don't think any corn crops in the United States were spared.
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Abruzzo •
Eight dollars a bushell ,
to three dollar a box cereal ??
The farmers are in the wrong end of the business.
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Saturday, August 11, 2012
Better weather, but too late for U.S. corn crop
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