The Midwestern region of the United States has experienced uncharacteristically hot weather in the last few weeks, which are a crucial time for crop farms. The region otherwise known as the Corn Belt has seen record temperatures reach over 105 Fahrenheit in recent weeks as reported by Reuters.
Drought conditions in the past week across the central United States have intensified, causing damage to crops in Missouri, Indiana and Southern Illinois. Some farmers are being forced into cutting stunted corn for silage, a low grade feed for cattle. The percentage of corn rated Good to Excellent dropped by 8% this week to just 40% and with the forecast of rain expected to miss the areas where it is most needed crop conditions look set stay at dangerously low levels.
The question now for corn crop is ‘just how low will stocks be?’, a stark contrast to initial expectations of a record harvest for 2012.
Corn prices closed at $6.72 per bushel and increased by 21.0% in June due to a substantial deterioration in crop conditions reports AGWeb.com. Fears of tight supplies have also left soybean prices higher, in June prices rose by around 13% just close at $15.13 per bushel.
Wheat stocks as of June 1, 2012 were estimated at 743 million bushels, a 14% decrease from a year prior leading to a 14.2% increase in price for this month at around $7.39 per bushel.