U.S. Midwest corn crops affected by rain, drought

by World Grain Staff
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CHICAGO, ILLNIOS, U.S. — Bill Long says the 1,500 acres of corn he grows in Illinois, U.S., is a mix of the good, the bad and the ugly, after soaking rains in June and July were followed by a dry August, Bloomberg reported on Sept. 1.

Some of his crop produced normal-sized ears, but many plants were hampered by disease and a lack of nutrients, and some are just dying. With similar results appearing on farms across the Midwest, there are growing signs that the U.S. Department of Agriculture (USDA) may need to cut its production forecast this month.

“I was still optimistic even after all the rain because the corn still looked good,” said Long, 59, who began harvesting Aug. 26 on land he farms about 25 miles (40 kilometers) west of Springfield, Illinois, U.S. “Some of it just ran out of gas.” He now expects yields to be “average at best” at 180 bushels to 200 bushels an acre, down from a record of about 220 last year.

While the USDA boosted its output estimate in August and prices have plunged for two straight months, farms in the world’s biggest corn-growing region are showing signs of strain before the bulk of the harvest begins. The Midwest had the fourth-wettest June since 1895, threatening to erode the benefits of crops from Missourito Ohio. that were planted early. Shaving as little as 5 bushels an acre off the average U.S. yield may boost cash prices by 29%, said Dan Hueber, the general manager of the Hueber Report in Sycamore, Illinois, U.S..

When the rains came, corn futures jumped 28% from June 15 to July 13, touching a one-year high of $4.54 a bushel on concern too much moisture would leave damaged plants. Then, prices plunged 17% through Tuesday as warm weather dried fields and the USDA unexpectedly raised its national yield forecast, citing the second-biggest plant population and third-highest ear weight ever.

Since then, the annual Pro Farmer Crop Tour estimated smaller ears after surveying fields in seven states, and the government reported higher insurance claims by growers. Still, with the slowdown in China pushing most commodities lower in recent weeks, closing corn prices on the Chicago Board of Trade have fluctuated between $3.73 and $3.82 since Aug. 12. December futures were down 0.9% at $3.72 on Aug 31.

“Some plants are dying prematurely” from stalk diseases and a lack of water and nitrogen to finish filling kernels with sugars and starch, said Kelli Bassett, a Springfield-based regional field agronomist at seedmaker Dupont Pioneer. For the plants, it’s like trying “to drink through a clogged straw,” she said.

U.S. corn yields will fall 1.3% to 168.8 bushels an acre this year from the record 171 bushels in 2014, the USDA said on Aug. 12. Production from 81.1 million harvested acres was estimated at 13.6 billion bushels.

Marketing adviser Pro Farmer said Aug. 21 that output would fall 2.7% to 13.3 billion, partly based on samples from 1,400 fields from Ohio to South Dakota. The average ear length measured on the tour was 6.56 inches (16.7 centimeters), down 3.4% from last year.

“The USDA’s corn and soybean yield estimates are lofty, given they do not account for the drier weather in the first half of August,” Morgan Stanley said in a report on Aug. 18. “These downside risks to acreage and yields suggest USDA’s production estimates are likely to drop from now to January.”

It will take time to gauge the crop damage, Dan Hueber of the Hueber Report said in a telephone interview on Aug. 26. His company is an advisory service and commodity brokerage.

“Farmers won’t know what fields will yield this year until the crop is harvested and then weighed and sold at the elevator because of the variability across fields,” Hueber said. “It will be a gradual drop off in USDA estimates. The difference between a 168.8 bushel national yield and something in the 163 to 164 range is equivalent to going from $3.50 cash corn to $4.50. It’s significant.”

The government updates its crop estimates on Sept. 11.

“The last two to three weeks of dry weather and increased disease took the top end off an already reduced crop,” DuPont Pioneer’s Bassett said.

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