USDA cuts corn crop estimates on Midwest drought

Former record crop down to predicted third-largest harvest

The U.S. Department of Agriculture has cut the nation’s corn harvest to an average of 146 bushels an acre, down 20 bushels from June estimates, due to a continuing Midwest drought that is doing more damage to crops than analysts thought, according to reports.

The USDA’s revised numbers, a 12 percent cut, drop the expected 2012–2013 harvest to 12.97 billion bushels — the third-largest on record, but the lowest yield since 2003. The USDA also reduced its forecast for corn ending stocks by 37 percent from June numbers, more than the 32 percent expected, said analysts. U.S. stockpiles are predicted to be at 1.183 billion bushels, up one-third from current levels.

Global corn stocks have also been cut, by 14 percent, although inventories will still be the highest they’ve been in three years. The overall report “tells me they feel pretty confident this crop has been hurt in a big way,” said Shawn McCambridge, an analyst at Jefferies Bache. Additional cuts are likely, said McCambridge, when the USDA’s August 10 report makes the first estimate of the harvest.