CHICAGO (BLOOMBERG) - In a year plagued with runaway inflation, high volatility and food shortages, US farmers are facing immense pressure.
The size of harvests in the United States - the world’s top corn producer and second-biggest soya bean grower - will define prices for months, with Europe hurt by heatwaves, Argentina planting likely delayed by drought, and until more is known about exports out of the war-torn Black Sea trading hub.
So far, erratic weather across the United States has made the job of forecasting the crop much harder. Yields are expected to be good, but not as high as the US Department of Agriculture is forecasting. With low stocks, the size of the crop really matters.
Early stops in south-eastern South Dakota along a key US crop tour show that the lack of sufficient rain has stressed corn and soya bean plants, hurting potential yields that the world is relying on to avoid shortfalls.
Both corn and soya beans were below average at the initial stops in South Dakota on the western leg of the four-day Pro Farmer Midwest Crop Tour.
Corn yield potential was estimated at 118.6 bushels per acre, well below the three-year average of 161.8 bushels. Soya bean pod counts stood at 792.5, below the 1,073 average. Some corn fields had been cut for silage, a sign of a poor-quality crop.
Corn yields were also below average in western Ohio in the initial stops of the tour's eastern leg, while soya bean pod counts far exceeded the three-year average. Excess rain delayed seeding in some parts, increasing the variability between fields.
"I heard it was dry, but I am shocked it as as bad as it is," said Mr Nathan Serbus, a Minnesota farmer and crop scout on the western leg.
The tour will later make corn yield and soya pod count projections for the entire states of South Dakota and Ohio. Later in the week, the western leg will assess Nebraska, Illinois, Indiana, Iowa and parts of Minnesota.
"There have been so much heat and extremes this growing season, I don't think the story is over about potential yield declines," Mr Kevin McNew, chief economist at agriculture technology firm Farmers Business Network, said before the tour.
Soya beans, in particular, are at risk as the crops used to make a wide array of foods as well as climate-friendly biofuel are still in a critical development state.
"With the planting delays this spring, there is still time for some of the soya bean crop to be made - or lost - in the next couple of weeks," Ms Jacqueline Holland, an analyst at Farm Futures, said ahead of the tour.
Overall, national corn and soya bean production is not likely to be as big as the US is forecasting, according to Mr Ben Buckner, a grains analyst for AgResource Company.
Crop yield potential remains "all over the place", he said.