Drought Monitor increases soybean, corn acreage under drought conditions in US; Chicago reacts



Image: Pixabay


The Drought Monitor update brought a new increase to US soybean and corn areas under drought conditions and leaves the 2023/24 harvest even more fragile.

The images released this Thursday (15) indicated that 51% of the areas cultivated with the oilseed are under drought conditions, compared to 34% last week. In corn, the index went from 49% to 57%. 

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The significant increases confirm the little rain that continues to reach key North American production regions, worsening the conditions of recent months where rainfall was below average. Although good for the rapid development of planting, the conditions that have been maintained do not favor the development of crops.

The states of Iowa and Illinois, the two largest producers in the United States, have seen significant growth in areas under severe or moderate drought. And right now, the entire American Midwest is the region of the country that is showing the most drought problems right now.

The current scenario has been promoting a reduction in the rates of crops in good or excellent conditions for both soybeans and corn in the United States, according to the weekly harvest monitoring bulletins reported every Monday by the USDA (United States Department of Agriculture) . In the last edition, the numbers came in at 61% for corn and 59% for soybeans. In the previous week, the data was, respectively, 64% and 62%.

MARKETS IN CHICAGO

At the Chicago Stock Exchange, markets reacted immediately to the new information, since the weather in the United States is the main vector driving grain prices. Thus, around 12:30 pm (Brasília time), soybean futures rose from 31.50 to 38.25 points, with more significant gains in longer contracts. July had US$ 14.19 and November – an important reference for the American harvest – US$ 12.74 per bushel.

“Today, the new harvest is rising more than the old harvest. This means harvest risk. Since the beginning of the week, the models showed the return of heat for next week and little rain for the center of the Midwest”, explains market analyst Eduardo Vanin, from Agrinvest Commodities.

Among corn prices, at the same time, the increases varied from 12.75 to 16.75 points, with July being quoted at US$ 6.20 and December, with US$ 5.65 per bushel.

Source: Carla Mendes | Notícias Agrícolas

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