USDA may cut corn crop estimate 2.8% to 12.554 billion bushels from August forecast as hottest summer since 1995 crimps Midwest yields, analysts say; inventories prior to next year's harvest seen at lowest since 1996
September 8, 2011
– The hottest summer since 1955 has winnowed corn yields in parts of the U.S. Midwest and sent prices to record highs for the harvest season, Bloomberg reported Sept. 8.
The U.S. Department of Agriculture could reduce its crop estimate for the second straight month Sept. 12, bringing it down 2.8% to 12.554 billion bushels from its August forecast of 12.914 billion bushels, according to the average estimate of 30 analysts in a Bloomberg News survey.
Inventories prior to the harvest next year will be the lowest since 1996, the survey said.
Cash-corn prices in Iowa and central Illinois have increased at least 71% over the past year to the highest ever prior to the start of the harvest this month, according to government data. The hottest temperatures in over 100 years hurt crops in parts of the Midwest and sent costs soaring for producers including Tyson Foods Inc. and ethanol makers such as Poet LLC.
The crop could shrink and raise the risk that prices move even higher, Dan Cekander, director of gain research for Newedge USA LLC said in a Sept. 7 interview. Supplies will remain tight for another year, placing a premium on planting additional acreage next year to produce a big crop to replenish stockpiles, Cekander said.
Overnight temperatures in Iowa and Illinois were up to 6 degrees Fahrenheit above average in July, according to the National Climate Data Center. Some farms from northeast South Dakota to southwestern Ohio saw less than half the normal rainfall since July, High Plains Regional Climate Center data show.
The extreme July heat damaged crops during their reproductive stage, leading to lower numbers of kernels on each ear of corn, MDA Information Systems Inc. agricultural meteorologist Kyle Tapley said.
Ear size is determined earlier in the growing season, but plants were stunted by delays in planting this year due to floods and cool temperatures, Tapley said.
Illinois was the center of the heat and dryness and the second-largest corn grower will be the “trump card” in determining final U.S. yields, president of Bower Trading Inc. Jim Bower said in an interview.
The USDA is predicting an average yield of 170 bushels an acre in Illinois, up from 157 bushels last year despite worse crop conditions. Around 40% of crops were in good or excellent condition as of Sept. 4, versus 60% last year, the USDA said.
The primary source of this article is Bloomberg, New York, New York, on Sept. 8, 2011.