It does not appear that drought conditions are easing on a national basis — just changing locations. The Drought Monitor maps at right show conditions on August 21 (top chart) and on December 4. The August 21 map indicated that 77% of the contiguous United States was suffering drought conditions to some degree and that conditions were severe or worse in 44% of the country. Those numbers for December 4 are 76% and 42% — not much improvement at all. The August 21 map was released just days before Hurricane Isaac made landfall on the Gulf Coast and eventually brought rain to the Mississippi and Ohio River valleys. That moisture plus the rain that moved into the eastern U.S. from Superstorm Sandy has certainly improved conditions east of the Mississippi but conditions have worsened markedly in the plains with drought conditions spreading in Kansas and, especially Nebraska and moving north as far as southern North Dakota. The hard red winter wheat areas of Kansas, Oklahoma and northern Texas remain very dry.

A story by Reuters on Thursday warned that as much as 25% of the winter wheat crop could be abandoned though those decisions will not be made until spring. USDA’s final Crop Condition report on November 26 rated only 33% of winter wheat acres as being in good or excellent condition while rating 26% as poor or very poor (PVP). Those figures compare to 52% and 13%, respectively, one year ago. Most notable, though, is that PVP ratings cover 40% of Texas wheat, 44% of Oklahoma wheat, 46% of Nebraska wheat and 64% of South Dakota wheat. Kansas, the state that produces the largest hard red winter crop, has 25% of its acres rated as PVP.

The December 4 drought also has obvious implications for the U.S. beef sector. Not only is wheat pasture short but grass conditions have deteriorated significantly from northern Texas all the way to North Dakota. As of October 26, the date of USDA’s final pasture condition ratings for the year, 70% of the beef cow herd is in states with 40% or more of pasture acres rated as in poor or very poor condition. And that’s not all — the availability of stock water, whether from  ponds or wells, is becoming critical in many, many areas.

USDA will release its latest estimates of U.S. and world crops next Tuesday, December 11. This will be the Feds’ last shot at these U.S. numbers before the final estimates for the 2012 crop are released in January. As can be seen at right, analysts surveyed by Bloomberg expect, on average, that USDA will increase corn carryout slightly to 659 million bushels, reduce soybean meal by 10 million bushels or, more dramatically, 7.4% and leave wheat stocks pretty much unchanged.

Most eyes are, of course, now on the development of South American crops. What once was primarily a soybean concern has now expanded to cover corn with the marked increase in 2012-13 U.S. corn imports to 100 million bushels. The previous record was last year’s 29 million bushels Analysts expect USDA to reduce its estimates of all four key crops slightly in next week’s report. Still, should these be the numbers, Argentina’s 2013 corn and bean crops will be 33 and 34% larger than last year, respectively. Brazil’s corn crop is expected to be only 4.3% larger than last year but its bean crop is expected to be 21.8% larger. The 80.84 MMT would mean a bean crop of 2.970 bil. bushels, just fractionally smaller than the current 2.971 bil. bushel estimate of the 2012 U.S. crop.