July 11, 2012

Drought causes US crop deteriorations

Dropping for a fifth straight week as unseasonably dry weather and record-high temperatures withered yield potential, the worsening of the corn and soy crops expanded in the US, the government said.

About 40% of the corn crop was in good or excellent condition as of July 8, down from 48% a week earlier and the lowest for this time of year since a drought in 1988, the Agriculture Department said Monday (July 9). An estimated 40% of soy got the top ratings, down from 45% and the lowest in 24 years for that date.

Corn futures in Chicago have surged 44% since June 15, reaching a nine-month high Monday (July 9), while soy rallied 18%. The heat and declining soil moisture may curb output, boosting cost for buyers of food, animal feed and makers of biofuel.

More than 91% of production in the US, the world's largest producer and exporter for both crops, was dry at the topsoil level and 59% was at high risk of intense stress and lower yields, T-Storm Weather said.

About 53% of the Midwest had moderate to extreme drought conditions as of July 3, the highest since the government-funded US Drought Monitor in Lincoln, Neb., began tracking the data in 2000. Soil moisture in Illinois, Indiana, Ohio, Missouri and Kentucky is so low that it ranks in the 10th percentile among all other years since 1895.