U.S. Midwest Drought Expands

Reuters writer Karl Plume reported yesterday that, “The worst U.S. Midwest drought since 2012 expanded over the past week despite mild temperatures as a lack of rain across the heart of the American farm belt threatened newly seeded corn and soybean crops, climatologists said in a weekly report.

“Below-average rainfall and high winds also exacerbated drought conditions in much of the High Plains region from top spring wheat producer North Dakota to the largest winter wheat state Kansas, the U.S. Drought Monitor report showed.

“Concerns about the dry start to the U.S. summer crop season and potential harvest shortfalls have sent corn and soybean prices soaring to multi-month highs, although both crops can still rebound with timely rains.”

Plume explained that, “As of June 20, 58% of the Midwest was in moderate drought or worse, the broadest area since 2012, the Drought Monitor data showed.”

The Reuters article added that, “The USDA said 64% of corn production area and 57% of soy area was affected by drought this week, up from 57% of corn and 51% of soybeans in the prior week.”

“The drought intensified over the past week in Iowa, with 83% of the top corn-producing state and No. 2 soybean producer in moderate drought or worse. In Illinois, the largest soy grower and second-largest corn producer, moderate drought or worse spanned 82% of the state,” the Reuters article said.

Elsewhere, Reuters writer Mark Weinraub reported yesterday that, “Chicago Board of Trade corn and soybean futures posted sharp declines on Thursday, pressured by a round of profit-taking and some weather outlooks that called for relief to drought stricken crops in the U.S. Midwest, traders said.”

The Reuters article indicated that, “But the dry conditions likely have already pulled the prospects for corn harvest below the U.S. Agriculture Department’s official projections of a record harvest.”

And Dow Jones writer Kirk Maltais reported yesterday that, “Improved prospects for rainfall in the Corn Belt may ease stress from drought conditions.”

Maltais noted that, “The grain futures contracts’ shift lower after four sessions of gains isn’t a signal of changing fundamentals in the market.”

Reuters writer Matthew Chye reported today that, “Chicago corn futures edged lower on Friday as traders booked profits after a recent rally over concerns of dry conditions in the key growing areas of the U.S. Midwest, although they were still poised to post weekly gains.”

Chye also pointed out that, “Argentina’s 2022/23 corn production is expected to be 34 million metric tons, down from the 36 million forecast previously, the Buenos Aires grains exchange said on Thursday, as the South American country grapples with the fallout of a major drought.

“Russia is 99.9% certain to quit a U.N.-brokered deal on the safe wartime passage of Black Sea grain next month because it no longer needs Ukrainian ports to export ammonia, a senior Ukrainian diplomat said.”