Drought in US Corn Belt Reminiscent of Both Bad and Good Years

Tuesday, May 30, 2023

U.S. corn prices have come under pressure this month amid predictions for a record crop, though a widespread dry stretch expected for the next two weeks has added back some weather premium, especially since drought conditions are already of concern.

Based on current drought coverage, five potential comparison years for 2023 arise: 2012, 2013, 2014, 2021 and 2022. Corn yield outcomes vary highly among this group, so key differences must be highlighted.

MAY DRYNESS

As of Tuesday, some 26% of U.S. corn areas were experiencing moderate or worse drought, the second-worst for the week after 29% in 2013. Records date to 2012, when 15% of corn areas were in at least moderate drought by this same week.

Around the same date in 2014, 2021 and 2022, moderate drought coverage spanned between 20% and 24% of U.S. corn areas.

This week’s Drought Monitor shows the most severe Corn Belt dryness in western areas including Kansas and Nebraska, most similar to the same weeks in 2013, 2014 and 2022. Dryness was less intense but more widespread in 2012, and it was concentrated in the Upper Plains in 2021.

For the U.S. corn market and especially with futures prices, 2013 has been a popular comparison for 2023, but soil moisture weakens that link. The central Corn Belt, including Iowa and Illinois, was very wet in May 2013 and mid-month corn planting in those states was very slow, though planting was quicker than normal this year.

May soil moisture maps make an excellent case for 2014, a scenario many corn farmers would root for. Very dry conditions gripped the central United States in May 2014, but above-average summer rainfall and slightly cool temperatures throughout the Corn Belt helped 2014 corn yield smash previous records.

Forecasts show the Corn Belt will be dry through the first week in June, then the models show chances for a pattern change, though the location and intensity are still in question. Adequate rainfall in July and August and moderate temperatures will be of top importance for corn’s success.

Source: hellenicshippingnews.com