Searing drought in the eastern Corn Belt cut hundreds of millions of bushels out of the US corn and soyabean crops but farmers will have little chance to recoup losses through higher prices, the government said Friday.
In its first estimate of the autumn harvest, the Agriculture Department forecast a corn crop of 10.350 billion bushels, down 12 percent from 2004. Soybeans were forecast at 2.791 billion bushels, down 11 percent.
Both crops set records last year.
But the cotton crop of 23.0 million bales weighing 480 lbs (218 kgs) apiece would rank second after last year's record. Wheat production, at 2.167 billion bushels, would be up slightly from 2004.
"Illinois and Missouri bore the brunt of heat and dryness, which irreversibly harmed some corn and threatened soyabeans," USDA said of the unusually dry growing season through July 31. Corn and soyabean ratings have declined since then, which might lead to smaller crops yet.
Even with smaller crops and no let-up in voracious demand at home and abroad for US corn and soyabeans, USDA said corn and soyabean prices would remain moderate.
It forecast this year's corn crop would fetch a farm-gate average of $2 a bushel, up 10 cents from its July estimate, and soyabeans $6 a bushel, up 40 cents.
"I think this (report) is fairly stabilising across the board," said private analyst John Schnittker, pointing to projections of plentiful global supplies. Soybean prices were the "most precarious," he said, for relying on Brazil to out-do last season's crop.
The USDA crop estimates were based on conditions at the start of this month. Soybeans mature during August. Corn is only a few weeks from harvest.
For powerhouse Illinois, the USDA estimated a corn crop of just 1.494 billion bushels, tumbling 29 percent from last year, and soyabeans at 376.4 million bushels, down 25 percent. Even so, Illinois would still be the No 2 corn and soyabean state behind Iowa.
Kevin Miller, who farms near Teutopolis in central Illinois, described the corn crop as "pretty poor" and "highly variable" in yield.
"I'll have some fields under 50 bushels (an acre) of corn," said Miller, and his top fields may yield just 100 bushels an acre when his average is 150. "Crop insurance is definitely going to be used this year."
In northern Illinois, farmers have described heat-blasted ears of corn that are barren on each end with only a ring of kernels three or four inches wide developing in the middle of the ear. In sandy soil, corn stalks may be only knee high.
In Chicago, traders said they expected futures prices for corn, soyabeans and wheat to dip when trading opened at the trend-setting Chicago Board of Trade. USDA's figures were on track with analysts expectations and there were forecasts for rain in the Midwest, which might boost crop size.
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