UPDATE 1-US corn yield seen at 10-yr low as drought expands-Poll

Tue Jul 24, 2012 3:47pm EDT

* Corn yield estimate down 4.7 pct from week ago
    * Forecasted yield at 10-yr low; production at 6-yr low
    * Drought eating away at crop prospects
    * Soybeans beginning to feel the heat

 (Adds details, analyst quotes, table listing analysts, bullet
points, byline)
    By Sam Nelson
    CHICAGO, July 24 (Reuters) - The U.S. corn production likely
dropped 5.2 percent in the past week to its lowest level in six
years and millions of U.S. corn acres may be abandoned due to
the expanding drought, according to analysts polled by Reuters
on Tuesday.
    The survey of 11 analysts resulted in an average estimated 
corn yield of 130.8 bushels per acre, the lowest in 10 years and
down 4.7 percent from a Reuters poll last week. That also is
below the U.S. Department of Agriculture's latest estimate of
146 bushels.
    Corn production was expected at 11.45 billion bushels, down
from the previous Reuters poll average of 12.077 billion and
down almost 12 percent from the current USDA estimate.
    The poll estimated the U.S. soybean yield at 38.6 bushels
per acre, down 1 percent from a week ago. Soybean production at
2.899 billion bushels also was down 1 percent from last week's
poll and 5 percent below USDA's forecast.
    Relentless heat and drought in nearly all major
corn-producing states, including top producers Illinois and
Iowa, prompted the lowered production forecasts.
    USDA's weekly crop progress report on Monday confirmed
expectations that the harsh weather was taking a toll.
    "Monday's crop ratings showed losses on par with the damage
seen during the 1988 drought if these conditions persist," said
Bryce Knorr, senior editor for Farm Futures Magazine.
    At spring planting, corn production had been expected to be
a record and near 15 billion bushels this year as U.S. farmers
got an early start to planting and sowed the most acreage since
the late '30s to capture profits from record corn prices.
    "Weather so far has taken almost four billion bushels off
the corn crop, so a lot of demand must still be rationed," Knorr
said.
    U.S. corn condition ratings fell for the seventh straight
week, and the USDA's crop condition report also showed soybean
conditions falling to near levels last hit in the 1988 drought.
    The USDA rated the corn 26 percent good to excellent as of
July 22, down 5 percentage points from a week earlier. It rated
soy at 31 percent good to excellent, the fourth weekly decline
and down from 34 percent last week.
 
    Analysts also were beginning to slash their forecasts for
the harvested corn area this year due to more and more reports
of farmers giving up on gathering any crop at all.
    "We are at 129.1 bushels per acre and with a one million
acre decrease in harvested acres, we have production at 11.342
billion bushels," said Rich Nelson, director of research for
Allendale Inc.
    The USDA's current forecast is for 88.9 million acres to be
harvested.
    "I'm two million acres below USDA on harvested acres of
corn," said Jerry Gidel, analyst for Rice Dairy LLC.
    Some analysts dropped their estimates for the soybean
harvested area to below USDA's outlook of 75.3 million.
    "We have corn harvested acres at 87 million, 1.9 million
below the government, and we took soybean harvested acres down 1
million," said Don Roose, president and analyst for U.S.
Commodities.    
    Chicago Board of Trade corn and soybean futures prices
soared to record highs of over $8 per bushel and over $17,
respectively, last Friday as the drought crept further into the
northwestern Midwest crop states of Iowa, Nebraska, Minnesota
and the Dakotas.
    A turn to wetter weather over the weekend brightened hopes
for a revival of some of the nation's corn and an even larger
portion of soybeans.
    Much of the corn crop has been harmed beyond repair, but
there is still time for soybeans to perk up and turn in some
respectable yields.
    "Timely rains over the next five to seven days will help
each crop in Iowa and Minnesota. It's too late to help the corn
crop in Ohio and Indiana, but the soybeans will be helped by
rains," said Sterling Smith, analyst for Citigroup.
    
                                     CORN          SOYBEAN               
                                                                         
                            Yield      Prod        Yield      Prod       
                                                                         
 Average Analyst Estimate   130.809  11.448         38.591   2.899       
 High Estimate              136.500  11.947         39.500   3.050       
 Low Estimate               121.500  10.800         36.500   2.700       
 USDA 2012 Projection       146.000  12.970         40.500   3.050       
 U.S. 2011                  147.200  12.358         41.500   3.056       
 Last Week's Reuters poll   137.223  12.077         39.058   2.931       
                                                                         
 ABN Amro                   129.000  11.350         39.000   2.925       
 Allendale Inc.             129.100  11.342         38.500   2.900       
 Citigroup                  135.000  11.947         38.900   2.915       
 Farm Futures               121.500  10.800         36.500   2.700       
 Futures Intl.              136.200  11.820         39.100   2.950       
 Goldman Sachs              126.000  na             39.500      na       
 Hightower Report           130.000  11.360         38.000   3.050       
 McKeany-Flavell            130.000  11.204         38.500   2.888       
 Rice Dairy LLC             136.500  11.855         39.500   2.960       
 Traders Group Inc.         130.000  11.000         38.000   2.800       
 US Commodities             135.600  11.797         39.000   2.898       
                                                                         
 
 (Additional reporting by Mark Weinraub in Chicago. Editing by
Ciro Scotti and Bob Burgdorfer)
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