WASHINGTON – Hot, dry weather in Illinois, Indiana and Ohio will cut the U.S. corn harvest by at least 1 billion bushels — a massive 8.6 percent — from last year's record, the government said on Tuesday.
However, the nation's wheat and cotton crops were flourishing for the most part, the U.S. Agriculture Department (search) said in its monthly report on American and international farm production.
The USDA projected a U.S. corn crop of 10.785 billion bushels, down 200 million bushels, or 1.8 percent, from last month despite th Indiana, 27 percent of corn was in those two categories and in Ohio, 16 percent was poor or very poor.
"The crop is crying for rain," said private consultant John Schnittker. Some rainfall was expected this week, blown into the eastern Corn Belt by Hurricane Dennis (search).
Deputy Agriculture Secretary Chuck Conner said soybeans in the eastern Corn Belt during a recent trip were "much smaller than usual." But, Conner added, "I didn't see anything that good rain from Dennis wouldn't benefit."
The storms may also carry spores of yield-cutting soybean rust fungus already found in Florida, Georgia and Alabama. That threat was "something to keep your eyes on the next couple of days," Conner told reporters.
At the Chicago Board of Trade (search), futures prices for corn traded slightly lower as traders focused on weather forecasts calling for rain in parched farming areas, then returned to opening levels. The July delivery contract was up 1/2 cent per bushel at $2.27-1/4.
Soybean futures for November delivery fell as low as $6.75 per bushel on the rain forecast before reversing direction to trade up 4 cents at $6.92 per bushel in the afternoon. September wheat fell 3-3/4 cents a bushel to $3.31-1/2.
Analyst Charlie Sernatinger of O'Connor and Co. said "the perception this morning is that we got less rain than had been expected" overnight in Illinois and Indiana.
In assessing the corn crop, USDA said yields would average 145 bushels an acre this year, compared to 160.4 bushels an acre for the 2004 crop, which enjoyed nearly ideal weather.
Across the Mississippi River, corn was in dramatically better shape. Three-fourths of the crop in Iowa, Minnesota and Nebraska was rated as good or excellent.
Globally, the USDA cut its monthly estimate of corn stocks for 2005/06 by nearly 7 million tonnes to reflect smaller crops in the United States and elsewhere. The worldwide stockpile of corn at the end of 2005/06 is now seen at 114 million tonnes, down from nearly 126 million tonnes in 2004/05.
Soybean fields west of the Mississippi River were in better condition than those to the east, USDA ratings showed. Overall, soybeans are in better shape than corn, now in a critical reproductive stage. Soybeans mature in August and tolerate drought better.
The USDA raised its U.S. wheat forecast because of record-high winter wheat yields in South Dakota and Montana and "much better than previously expected" yields for soft red winter wheat. It also said durum and spring wheat crops would be 4 percent larger than last year.
However, lower yields are now forecast for part of the Great Plains because dry spring conditions had more of an impact than previously thought, it said. Colorado, Kansas, Oklahoma and Texas were down by a total 46.5 million bushels , it said.