$10 Corn and $20 Soybeans to Pit Food Against Fuel
The average corn yield in the United States this year could drop to as low as 115 bu./acre and the soybean yield could drop below 37 bu./acre unless it starts raining soon and continues to rain hard every week across a wide swath of the central Corn Belt. If yield damage is as extensive or worse then analysts think, corn prices could break through $10/bushel and soybean prices could pierce $20/bushel.
...
In two previous droughts, yield losses were greater than 10%. Corn yield dropped 30% below trend yield in 1988 and 20% below trend in 1983. A 20% yield decline would put the U.S. average yield between 130 and 132 bu./acre.
"That is a catastrophe," says Basse. On top of the yield loss, Basse expects 2 million to 3 million acres of corn to be abandoned. "We are finding fields in Indiana and Illinois that will yield nothing," he says.
...
The dramatic drop in corn and soybean yields will soon turn into a global food issue. "The markets will not top until we see potential for good rains that can save the soybean crop from a becoming a total disaster and stabilize the corn crop," Roggensack says. Potential average yields between 114 and 140 bu./acre for corn are reasonable using historical studies, he says.
Falling corn and soybean yields will force more feeding of wheat, which could tighten world food supplies further, particularly if a developing El Nino strengthens, causing drought in the Southern Hemispheres wheat-growing regions.
http://www.agweb.com/article/10_corn_and_20_soybeans_to_pit_food_against_fuel/