Content ID

316957

Drought scorches U.S. corn, soy, and wheat crops

In its latest forecast of the fall harvest, the USDA estimated the corn crop at 14.75 billion bushels.

U.S. farmers will reap two of their largest-ever corn and soybean crops, the first step to assuring an abundant food supply, the government said on Thursday, despite drought damage in the Northern Plains and Upper Midwest. The wheat crop, meanwhile, will be the smallest in 19 years due to drought.

Corn, soybeans, and wheat are the three most widely planted crops in the country. Corn and soybeans are used in livestock rations and as ingredients in foods from cereals to packaged goods. Wheat is used in bread, pasta, and bakery products.

In its latest forecast of the fall harvest, the USDA estimated the corn crop at 14.75 billion bushels. The soybean crop would be 4.34 billion bushels, it said, and the wheat crop would total 1.7 billion bushels.

If the forecasts prove true, it would mean the second-largest corn and the third-largest soybean crops on record. The wheat crop would be the smallest since 1.6 billion bushels in 2002.

Although they would be significantly larger than the 2020 harvests — corn up 4%, soybeans up 5% — the prospects for corn and soybeans wilted during a hot and arid July. The USDA chopped 415 million bushels, or 3%, from its July projection of the corn crop. Its soybean estimate was 1.5% smaller than the July figure. The wheat estimate was sliced by 3% from July.

Robust demand by livestock producers, processors, and exporters would consume nearly all of this year’s corn and soybean crops by the time the new crop is ready for harvest late next summer. According to USDA economists, season-average prices for this year’s corn, soybean, and wheat crops will be the highest since the end of a seven-year commodity boom in 2013 and 2014.

Corn yields will drop by at least 20 bushels an acre in drought-hit Minnesota, South Dakota, and North Dakota, said the USDA. Across the Mississippi River, Illinois, Indiana, and Ohio will see their highest yields ever. Illinois ranks second to Iowa in growing corn, followed by Nebraska, Minnesota, and Indiana. The average corn yield nationwide, forecast at 174.6 bushels an acre, is nearly 5 bushels lower than the July projection. Soybeans follow a similar pattern; the forecast of the U.S. average yield was pulled down by lower yields in the Northern Plains.

Spring wheat, grown in the Northern Plains and Pacific Northwest, was forecast at 343 million bushels, down 41% from 2020 due to drought. Average yields of 30.6 bushels an acre would be the lowest since 2002.

Canada, one of the world’s agricultural giants, has also suffered in the drought. The USDA forecast its wheat crop at 24 million tonnes, a drop of nearly a quarter in a month. “Canada’s canola crop is lowered (by) 4.2 million tonnes to 16 million on drought in the Canadian prairies,” said the USDA. Canada and China are the two largest producers in the world of the oilseed.

USDA forecasts of the corn, soybean, and wheat crops were lower than commodity traders had expected. Futures prices rose in response to the outlook for smaller supplies in the United States and around the world.

The monthly Crop Production report is available here.

The companion WASDE report is available here.

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