Bloomberg News

U.S. Corn Harvest Accelerates After Drought; Soy Ratings Decline

August 27, 2012

The U.S. corn harvest is proceeding at the fastest pace ever after farmers planted early and the worst drought in generations accelerated crop maturity, the government said. Soybean conditions fell.

About 6 percent of the corn was harvested as of yesterday, compared with 4 percent a week earlier and none a year ago, the U.S. Department of Agriculture said today in a report. About 26 percent of the crop was rated mature, up from a revised 16 percent a week earlier, increasing the risks wind and rain will knock ears off stalks or blow plants over.

Corn futures surged 60 percent since mid-June before today, prompting the United Nations to predict higher global food costs. Tyson Foods Inc. (TSN:US), the largest U.S. meat processor, said Aug. 6 its profit will be lower after paying more for grain to feed animals.

“We started taking in corn on Aug. 17, the earliest ever,” Scott Docherty, the general manager for Monticello, Illinois-based Top Flight Grain Cooperative, said in a telephone interview before the report. “Farmers are harvesting early because many fear that the heat weakened the stalks and they don’t want to lose any more bushels.”

Docherty said the corn crop in central Illinois may be 35 percent smaller than last year. Nationwide, about 22 percent of the crop was in good or excellent condition, down from 23 percent a week earlier and 54 percent a year earlier.

About 30 percent of the nation’s soybeans were rated good or excellent of Aug. 26, compared with 31 percent a week earlier, the USDA said. Approximately 8 percent of the plants were dropping leaves, a sign of maturity, up from 4 percent a week earlier and 4 percent on average the prior five years.

Crop ratings are the worst for this time of year since 1988, when corn production plunged 31 percent from a year earlier and soybeans declined 20 percent. This year, corn output will fall 13 percent to 10.779 billion bushels, the smallest since 2006, the USDA said Aug. 10. The soybean crop may be 12 percent smaller at 2.692 billion bushels. The government will update its crop forecasts on Sept. 12.

Corn and soybean prices surged to records this month as output was poised to decline for the third straight year. Based on average temperatures and rain in June and July, the drought in the Midwest was the most-severe since 1936, according to T- Storm Weather LLC.

About 51 percent of the Midwest was in a moderate to exceptional drought on Aug. 21, down from 66 percent a week earlier and up from 9.5 percent a year earlier, according to the U.S. Drought Monitor.

To contact the reporter on this story: Jeff Wilson in Chicago at tdreibus@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.


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