Crop conditions for soybeans and corn have worsened in the latest crop tour findings in the US which confirmed hot and dry weather this summer has taken a toll on yields
According to the U.S.Department of Agriculture’s (USDA) latest crop tour, soybeans in good to excellent condition dropped three percentage points from the previous week to 57%. The figure missed analyst estimates of 60%.
USDA found that corn in the same condition fell two percentage points to 62%, missing expectations of 64%.
The data is suggestive that this summer’s megadrought and back-to-back heat waves across the northwest of the U.S. and Midwest are taking a toll on crops. The latest drought monitor data shows the US West continues to experience a severe drought.
Last week, the USDA’s World Agricultural Supply and Demand Estimates (WASDE) report showed declining grain supplies would keep food inflation elevated.
The closely watched supply and demand report slashed estimates for corn yields and stockpiles. World inventories for wheat were reported near a five-year low.
Soybeans and corn in Chicago have been rising for the last several days post WASDE.
Wheat in Chicago is up for a fourth day and trading near a decade high, after the WASDE report showed global inventories were near a five-year low
The Bloomberg Grains Index is up 81% since the beginning of the virus pandemic.
Diminished crop yields and inventories due to adverse weather conditions mean food inflation will be sticking around well through 2022.
… and what does this all mean for the average consumer? Well, grocery prices are expected to surge later this year.