October 26, 2022


Dry weather in the US affects corn farmers


82% of the US was experiencing abnormally dry to extreme drought conditions as of October 20, according to data from the US Drought Monitor, as analysts said that since 2000, this is the highest area experiencing unusually dry conditions, S&P Global reported.


The ongoing La Nina phenomenon, which typically causes drier conditions over parts of the US and above-average hurricane activity over the Atlantic Basin, can also be blamed for some of the dryness in the US.


Rain was still needed in most of the US during the critical months for corn growth. According to a report from the National Oceanic and Atmospheric Administration's environmental data division, the period from July to September was the warmest on record for this three-month span.


Due to the dryness, some localised crops may have experienced quality issues in addition to a decreased overall yield for US corn.


Dryness took control and continued the trend of lowering estimates for yields and production after a wet start to the MY 2022–23 US corn planting season dampened expectations of record-high yields or production.


The US corn yield estimate for MY 2022–23 was revised downward three times between May and October. The dryness during the growing season was a major factor in the US Department of Agriculture's reduction of its US corn yield estimate for the MY 2022–23 from 177 to 171.9 bushels per acre in October.


Additionally, this caused a decline in US corn production figures.


The US Department of Agriculture (USDA) has revised its estimate of US corn production downward by 4%, or 61 million bushels, to 13.85 billion bushels (364.11 million mt), from its initial estimate in May. The estimated US corn production for MY 2022–2023 is at its lowest level in three years.


The USDA has noted a similar decline in US corn export figures over the months. A smaller crop and higher prices were cited as reasons for the reduction in the estimate of corn used for ethanol.


The estimated US corn ending stock for MY 2022–23 decreased by more than 16% from May through October.


A recent report by the University of Illinois showed historical data that indicates information regarding the size of the US crop after October is limited. By October, the US corn output figures are almost certain, and attention turns to the corn crops in South America, according to the university.


Corn production is projected to be lower globally on a yearly basis due to lower production in the US, the EU, and some other nations amid tightening stocks.


-      S&P Global

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