Corn and Soybean are those agricultural crops which grow in a mild climatic condition and grow well in large quantities. Many of us must be aware that the USA has gone through a long period of drought which challenged the production and price of many of the agricultural commodities. At this period of time also, the drought has withered the farm fields of corn and soybean in USA. This situation has hinted that the record prices may persist which is supposed to threaten the recovery in the production, vital enough to increase the government inventories. Agro economists have started remembering the period of 1930s which consisted drought as a feature. Looking into the current weather conditions, agricultural meteorologists argue that if the current wet conditions do not come up with a significant change, drought will almost be sure going into the planting season.

Last year also we heard lots of news regarding the drought in the United States of America and that had really taken the prices of agricultural commodities higher. Corn and Soybean reached their all-time high last year due to drought in USA which also triggered the South American growers to increase the plantings. USA is the largest grower of Corn and second-largest grower of soybeans; moreover Chicago futures are global benchmarks, the industrial experts argue that the risk of drought affecting the prices remain vivid in 2013 too. Very disappointing to hear the weather experts say that there is no such sign seen in the climate which could actually suggest that the drought this year would be shorter enough and the production of corn and soybean this year could relieve to some extent.

The drought in 2012 in the United States of America covered almost 62 percent of the 48 probable production states; and the tragic part remains that this may continue to the southern Great Plains as forecasted by the climatologists in the government agencies. Last year, it was the warmest on records for the country. USDA data show that the corn production in the country fell by 13 percent in 2012/13 which was the lowest since 2006/07. Similarly, the soybean harvest also observed the fall of 4 percent during the same period.

The various parts of lowa produce almost double the corn of Argentina, the third-largest producer in world, and almost as much soybeans as China, still remained in the shock of the extreme drought as per the data on January 1. Not only corn and soybean, this weather is also expected to hurt the winter wheat. It is yet to be seen when the production comes out of the drought shock.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.