US rains a 'legitimate fear' for corn, soy markets

Excessive rains in parts of the Midwest have scuppered upbeat forecasts for US corn and soybean yields, besides raising question marks over the accuracy of a much-watched report due on June 30.

Many commentators have downplayed the threat to US crop production by heavy rains in north western Midwest areas including Iowa, the top corn and soybean producing state, flagging the boost to yield prospects in areas that receive ample rains without flooding.

However, Michael Cordonnier, the influential crop scout, termed concerns "legitimate", saying that rains - which on farms have reached "a lot more" than the 4-6 inches of rain forecast for this week have indeed caused widespread damage.

"You have had highways closed. There is flood damage, ponding," Dr Cordonnier said.

"And there is more rain in the forecast. These areas are not going to be able to dry out in time for much replanting."

'Not going to happen anymore'

Dr Cordonnier said that the damage was not enough to warrant a downgrade of his forecast of a 165 bushels-per-acre average US corn yield this year, which would beat the record 164.7 bushels per acre set in 2009.

"But the yield estimates of 170-175 bushels per acre which were floating around, they are not going to happen anymore," he said.

"The trouble is that this is hitting worst the most productive parts of Iowa, and of Minnesota and South Dakota."

Report doubts

Furthermore, with the inability to replant means farmers are likely to lose at least 1m acres, and "at the high end 2m acres" in crop plantings.

This implies that figures unveiled in a much-watched US Department of Agriculture report on domestic crop acreage, due on June 30, will be "too high".

"The data in the report were taken before all this occurred," Dr Cordonnier, based in Illinois, said.

Comparison with 1993

However, he added that comparisons with 1993, a particularly wet year - when the US corn yield slumped 23% to 100.7 bushels per acre, and the soybean yield by 13.3% to 32.6 bushels per acre - were not warranted yet.

"This is no 1993 yet. We would need this for another two or three more weeks."

In 1993, "it started raining in June, and just did not stop. The Mississippi river was out over its banks all over the place".

In Iowa, Mike Mawdsley said that a tour on Wednesday, around his county Kossuth, the state's largest, and revealed "hail damage in the far northern region", on the Minnesota border.

There were also "numerous ponds of 5-10 acres - yes, some 30-40 or more - drainage ditches and creeks looking like rivers, rivers looking like lakes".

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