U.S. corn production may be 24 percent smaller than the government’s estimate as drought in the Midwest slashes yields and spurs farmers to abandon acres, Farm Futures magazine said, citing a survey of 1,800 growers.

The corn harvest may plunge to 9.86 billion bushels this year, below the U.S. Department of Agriculture’s current projection of 12.97 billion bushels and 33 percent less than the government’s June forecast for a record 14.79 billion, Farm Futures said today in an e-mailed statement. The USDA is scheduled to update its estimates Aug. 10.

“The scope of this year’s drought is difficult to comprehend, both in its intensity and coverage,” Arlan Suderman, a market analyst at Farm Futures, said in the statement. “The market clearly has more work to do as it attempts to bring demand into balance with the shorter supply.”

Corn futures have surged 56 percent on the Chicago Board of Trade since mid-June, touching a record $8.205 a bushel on July 31, as the U.S. suffered its worst drought since 1956. The USDA has declared more than half of U.S. counties as disaster areas, with corn and soybean crops in the worst condition since 1988.

U.S. corn yields may average 117.6 bushels an acre this year, compared with the USDA’s projection of 146 bushels, Farm Futures said. About 84 million acres will be harvested, almost 5 million less than predicted by the government, as farmers plow under failed crops, the magazine said.

Soybean production may be “just under” 2.7 billion bushels with national yields averaging 35.8 bushels an acre, Farm Futures said. The USDA estimates the soybean harvest at 3.05 billion bushels with yields of 40.5 bushels an acre.

Growers were surveyed from July 20 to Aug. 2.

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

 

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