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Drought expanded last week in U.S. corn-growing areas, reaching the second highest level for late July in 24 years amid a colder but drier week. Next week's data could show a worsening of drought conditions in the Corn Belt due to this week's scorching temperatures and scattered rains, reigniting some crop concerns after July's favorable weather.
The US Drought Monitor shows 59% of US corn affected by moderate drought or worse on Tuesday, up from 55% the previous week, which was a six-week low. About 23% of corn was experiencing severe drought or worse, up from 21%.
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These numbers are significantly better than the late July 2012 moderate and severe drought coverage of 85% and 67%, respectively, although they are the second worst week since 2000.
However, the share of corn areas under severe drought or worse is similar to some previous years where yields were decent. This includes 2021, 2006 and 2005, when severe drought hit 18-21% of US corn in late July. This same week in 2006 featured the largest extent of moderate drought in the Corn Belt after 2023 with coverage of 46%, followed by 38% in 2005 and 36% in 2021.
Refinitiv data identifies these three years among the top Midwest climate analogues of 2023 when considering the last 90 days of precipitation and 60 days of temperatures. 2005 and 2006 are overwhelmingly the best matches, followed by 1989, 2021 and 2007. No other year since 1981 meets the similarity criteria.
Climate indices do not discern the timeliness of precipitation, potentially weakening the argument for these analogues. But it is interesting that corn production has come close to trend in these five years. Soybean yields varied more, although none were among the best or worst.
It's also important to note that all five potential analogues had above-average Midwest rainfall in August, and four of them were warmer than normal. This suggests that a shift back to a wetter climate here is more important for yield potential than a cooling in temperatures.
Chicago grain futures fell on Thursday, in part due to expectations of favorable weather for August. The U.S. government's outlook on Thursday showed a mixed precipitation bias in the Corn Belt through Aug. 10.
SPRING WHEAT
Drought is increasing in US spring wheat country, with 43% from areas in moderate drought, the highest since March and up from 31% the previous week. About 4% of spring wheat is in severe drought, the first trace of severe drought since April. However, spring wheat in the largest U.S. producer, North Dakota, has decent potential, according to scouts on an annual tour, who pegged the state's production at 47.4 bushels per acre on Thursday. That's down from 49.1 bpa on last year's tour, but better than the five-year tour average of 40.1 bpa, which includes 29.1 in 2021.
North Dakota spring wheat production reached a record 50 bpa in 2022, despite fears that delayed planting would be limiting. However, the state's wheat had zero drought coverage a year ago, compared to 44% this week.
The Department of Agriculture estimates North Dakota's spring wheat yield at 47 bpa compared with 33.5 in 2021 and a string of 49s between 2018 and 2020. The devastation of drought elsewhere.
Source: Karen Braun | agrolink
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