Agriculture Dept. issues improved crop forecast

The U.S. harvest was staggering toward disaster several weeks ago, but flickers of hope surfaced on Monday., David Streitfeld report for The New York Times. Recent floods were likely to damage the corn and soybean harvests less than expected, and farmers planted more corn than previously expected, which should boost output, the Department of Agriculture said.

"This will allow a little breathing room, assuming we don't have inclement weather during the rest of the growing season. said Daniel W. Basse, president of AgResource, a Chicago consulting firm. "Corn prices, which have repeatedly hit new highs, fell sharply Monday to $7.25 a bushel after the report from the Agriculture Department," Streitfeld writes. "Wheat, which had been moving up in the general enthusiasm for commodities, also tumbled. Soybean prices fluctuated but moved above $16 a bushel to a new high on supply worries." According to Basse, an unprecedented move by the USDA to open up millions of acres of conservation-reserve land for 2009 crops has lessened.

The government expects a loss of 3.5 million acres of corn and soybean acres from the Midwest rains of May and floods of June, down from previous estimates of 5 million acres. A major factor in the shift is last-minute replanting efforts by farmers. "The Agriculture Department said farmers planted 87.3 million acres of corn, up from 86 million they said they intended to plant in March and second only to last year's acres, the highest since World War II," Streitfeld writes. "Corn prices were so high that farmers put marginal land into production and shaved acreage devoted to other crops." Click here to read Streitfeld's article. View the USDA's "Weekly Weather and Crop Bulletin" for July 1 here.