The U.S. corn production likely dropped 5.2 percent in the past week to its lowest level in six years and millions of U.S. corn acres may be abandoned due to the expanding drought, according to analysts polled by Reuters on Tuesday.
The survey of 11 analysts resulted in an average estimated corn yield of 130.8 bushels per acre, the lowest in 10 years and down 4.7 percent from a Reuters poll last week. That also is below the U.S. Department of Agriculture's latest estimate of 146 bushels.
Corn production was expected at 11.45 billion bushels, down from the previous Reuters poll average of 12.077 billion and down almost 12 percent from the current USDA estimate.
The poll estimated the U.S. soybean yield at 38.6 bushels per acre, down 1 percent from a week ago. Soybean production at 2.899 billion bushels also was down 1 percent from last week's poll and 5 percent below USDA's forecast.
Relentless heat and drought in nearly all major corn-producing states, including top producers Illinois and Iowa, prompted the lowered production forecasts.
USDA's weekly crop progress report on Monday confirmed expectations that the harsh weather was taking a toll.
"Monday's crop ratings showed losses on par with the damage seen during the 1988 drought if these conditions persist," said Bryce Knorr, senior editor for Farm Futures Magazine.
At spring planting, corn production had been expected to be a record and near 15 billion bushels this year as U.S. farmers got an early start to planting and sowed the most acreage since the late '30s to capture profits from record corn prices.
"Weather so far has taken almost four billion bushels off the corn crop, so a lot of demand must still be rationed," Knorr said.
U.S. corn condition ratings fell for the seventh straight week, and the USDA's crop condition report also showed soybean conditions falling to near levels last hit in the 1988 drought. The USDA rated the corn 26 percent good to excellent as of July 22, down 5 percentage points from a week earlier. It rated soy at 31 percent good to excellent, the fourth weekly decline and down from 34 percent last week.
Analysts also were beginning to slash their forecasts for the harvested corn area this year due to more and more reports of farmers giving up on gathering any crop at all. "We are at 129.1 bushels per acre and with a one million acre decrease in harvested acres, we have production at 11.342 billion bushels," said Rich Nelson, director of research for Allendale Inc.
The USDA's current forecast is for 88.9 million acres to be harvested.
"I'm two million acres below USDA on harvested acres of corn," said Jerry Gidel, analyst for Rice Dairy LLC.
Some analysts dropped their estimates for the soybean harvested area to below USDA's outlook of 75.3 million. "We have corn harvested acres at 87 million, 1.9 million below the government, and we took soybean harvested acres down 1 million," said Don Roose, president and analyst for U.S. Commodities.
Chicago Board of Trade corn and soybean futures prices soared to record highs of over $8 per bushel and over $17, respectively, last Friday as the drought crept further into the northwestern Midwest crop states of Iowa, Nebraska, Minnesota and the Dakotas.
A turn to wetter weather over the weekend brightened hopes for a revival of some of the nation's corn and an even larger portion of soybeans.
Much of the corn crop has been harmed beyond repair, but there is still time for soybeans to perk up and turn in some respectable yields.
"Timely rains over the next five to seven days will help each crop in Iowa and Minnesota. It's too late to help the corn crop in Ohio and Indiana, but the soybeans will be helped by rains," said Sterling Smith, analyst for Citigroup.