August 1, 2012

In the next two weeks, US soy yields may fall to as low as 34-35 bushels per acre, if no rains fall on the drought-stricken crop.

US soy yields were currently forecast at between 37-38 bushels per acre, Peter Nessler Jr., executive vice president commodities, told Reuters at a grains conference in Melbourne.

"If we don't get much rain between July and August, yields could fall as low 34-35 bushels per acre," he said.

New crop US corn yields were probably around 132-138 bushels per acre, he added.

"Though there are some people who think we could go as low as 125, which would be fairly catastrophic," Nessler said.

The USDA lowered its corn yield estimate to 146 bushels per acre in June, while forecasting soy yields at 40.5 bushels per acre. The US drought has fired up grains markets over the past six weeks, lifting corn and soy prices to record highs earlier this month.

Corn and soy conditions in the US Midwest deteriorated further last week as the most expansive drought in more than 50 years ate away at crop yields in major producing states including Iowa and Illinois, the USDA said in a report after the market closed on Monday (July 30).

Nessler said that if dry weather in the US Midwest persisted further, "US$20 per bushel soys, are not out of the question."

The most actively traded November soy contract was trading at US$16.40 a bushel in Asian trade on Tuesday (July 31).