Tuesday, June 10, 2008

U.S. Corn Crop May Drop 10% as Yields Fall, USDA Says

We are going to link to the Crop Progress Report, rather than extract the details because Bloomberg is all over what is turning into a very serious situation in the Ag markets. They have five articles this morning, first, the headline story:
The U.S. corn harvest will drop 10 percent this year as excessive Midwest rains reduce yields and farmers shifted acres to wheat and soybeans, the government said.

Farmers will produce 11.735 billion bushels of corn, down from 13.074 billion last year and a May forecast of 12.125 billion, the U.S. Department of Agriculture said today in a report. The USDA slashed its estimate of inventories before the 2009 harvest by 12 percent to 673 million bushels, the lowest since 1996 and less than the 728 million expected on average by analysts in a Bloomberg survey....MORE

Rainstorms sweeping the biggest corn states in the U.S. are damaging a crop that's already failing to keep pace with global demand for food, fuel and cattle feed....

Corn climbed for a fifth day to trade close to a record and soybeans rallied in Chicago on speculation crop conditions will further deteriorate following excessive rains in the U.S. Midwest.

About 60 percent of the corn crop was in good or excellent condition as of June 8, down from 63 percent a week earlier, and 77 percent a year earlier, the U.S. Department of Agriculture said yesterday in a report. Some 89 percent of the seeds had emerged from the soil, compared with 98 percent a year earlier....

U.S. Soybeans Crop May Rise 20% After Farmers Boost Acres

The U.S. soybean crop will be 20 percent larger than a year ago as growers plant more of the oilseed after prices surged to a record, the government said.

The harvest will total 3.105 billion bushels, up from 2.585 billion bushels last year, the U.S. Department of Agriculture said today in a report. A June 30 report may show farmers switching to soybeans from corn as Midwest rains make the oilseed a preferable crop to plant, prompting a higher estimate, analysts said.

``That's the nature of the beast,'' said Mike Salonen, a commodities broker with Midwest Futures in Norfolk, Nebraska. ``If corn isn't working, you can plant beans tomorrow and they'll be up in three days,'' Salonen said....

Food Companies Form Coalition to Oppose U.S. Biofuels Subsidies

Industry groups representing companies including Kellogg Co., Tyson Foods Inc. and Kroger Co. are coordinating efforts to reduce U.S. biofuels-use requirements with a new ``Food Before Fuel'' lobbying campaign.

The Grocery Manufacturers Association, the American Meat Institute, the National Restaurant Association and other groups say rising corn-based ethanol production is pushing food costs higher. Adding industry muscle to fight a federal requirement to about double ethanol production to 15 billion gallons by 2015 may slow the increase, helping company profits and easing consumer prices, said grocery association chief Cal Dooley....