U.S. soybean harvest threatened by August weather outlook
By Mark Weinraub
Soybeans in key growing areas of the U.S. Midwest will likely face more hot and dry conditions during August, their critical growing month, that could threaten harvest yields, according to weather forecasts.
The world needs a big U.S. crop to replenish global stockpiles that have been pegged at a six-year low. Russia's invasion of Ukraine disrupted trade flows and triggered worries about possible food shortages.
But U.S. soybean plantings fell below expectations this spring as farmers turned to corn. Additionally, adverse weather in certain areas quickly eroded soybean harvest expectations and raised concerns that supplies will shrink even further next year.
Now, the western and southern parts of the soy belt are at risk.
"We have got some terrifically big areas that are dry," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. "Does the 70% that is good make up for the 30% that is under stress?"
Soybean futures have surged 6.8% since falling to a seven-month low on July 22 as concerns about the weather have crystallized.
In July, the government slashed its estimate for domestic ending stocks by 50 million bushels due to the surprisingly small soybean acreage estimate. Now, the weather outlook threatens its current yield projection of 51.5 bushels per acre.
Crop conditions had deteriorated for six straight weeks following the U.S. Agriculture Department's first ratings report on soybeans in mid-June. It was the longest stretch of declines since 2012, when a crop-wasting drought settled over the United States.
Ratings edged up 1 percentage point in the week ended July 31 after rain in states including Illinois, Kentucky and Michigan but continued to drop in major production states such as Iowa, Kansas and Nebraska.
"It depends on where you go and where you look," said Stephanie Porter, outreach agronomist at the Illinois Soybean Association. "The next couple of weeks will tell the tale."
Rains during the next few weeks – a period when soybeans progress through their critical pod-filling stage of development could still revive stressed soybeans.
The latest outlooks call for adequate rain in the East during the first half of August while chances for storms are more erratic in the West before a turn to even drier and hotter weather by the end of the month.
"I do not think they have necessarily lost it," said Drew Lerner, president of World Weather Inc. "They could get a rain tomorrow and it could do okay. But it is imperative that they get a rain."
(Reporting by Mark Weinraub; Editing by David Gregorio)
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