Midwest drought fears worsen, grain prices jump

CHICAGO (Reuters) - Some areas of the parched U.S. Midwest were expected to get more beneficial rain on Wednesday but cities, towns and farmers were still struggling with triple-digit heat and little relief was seen from the worst drought in half a century.

Forecasters said that after weeks of hot, dry weather the northern Corn Belt from eastern Nebraska through northern Illinois was likely to see a second day of scattered rains. But in the southern Midwest including Missouri and most of Illinois, Indiana and Ohio more hot dry weather was likely.

"There's no change in the drought pattern, just thunderstorms shifting around. There are no soaking rains seen through August 8," said Andy Karst, meteorologist for World Weather Inc.

Missouri temperatures on Wednesday were hovering near 100 degrees Fahrenheit, with St Louis at 101 F at midday. The high in Chicago was expected to reach 98 F and then cool to highs in the upper 80's for the rest of the week.

The outlook sent Chicago Board of Trade grain markets bouncing higher by early afternoon after prices had come down from last week's record highs on milder weather forecasts.

Corn for September delivery was trading 6 cents a bushel higher at $7.96 and August delivery soybeans jumped 43-1/4 cents at $16.92-3/4. September wheat was up 20 cents at $8.98-3/4.

The soaring prices in the United States - the world's largest exporter of corn, soybeans and wheat - has rattled food markets worldwide on fears that food inflation will be imported, food aid or supplies for hungry nations from China to Egypt will not be available, and food riots could occur as in the past.

Major losses in the giant U.S. corn crop, which feeds dozens of products from ethanol fuels to livestock feed, have already been reported by field tours this week. Soybeans, planted later than corn, are now struggling to set pods but, if forecast rains appear, may escape the worst drought effects.

A Reuters poll on Tuesday said U.S. corn yields could fall to a 10-year low and the harvest wind up the lowest in six years. All eyes are on the U.S. Agriculture Department's next crop report on August 10, the first official estimates based on field surveys of damage. That damage has already been clear from falling weekly crop reports from key Corn Belt states.

"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. "Weather so far has taken almost 4 billion bushels off the corn crop, so a lot of demand must still be rationed."

In Putnam County, Indiana, crop scouts this week did not even stop to inspect corn fields since a glance convinced them farmers would plow it under rather than try to harvest anything. But scouts in central Illinois on Wednesday also reported some corn fields were better than expected, having benefited from early planting and pollination after a warm winter and spring.

Livestock producers, who depend on corn and soybean meal to feed dairy cattle, hogs and poultry, have pushed the Obama administration to ease a mandate to use corn to make ethanol, so far to no avail. Ethanol now consumes 40 percent of U.S. corn.

But ethanol producers have felt the same sting from record high corn prices. U.S. ethanol production fell to a two-year low last week, the sixth straight week of declines, the U.S. Energy Information Administration said on Wednesday.

SHAPE OF THINGS TO COME?

The U.S. drought has been blamed on the El Nino phenomenon in the western Pacific Ocean, a warming of sea temperatures that affects global atmosphere and can prevent moisture from the Gulf of Mexico from reaching into the U.S. Midwest breadbasket.

But some scientists warn that this year's U.S. drought, already deemed the worst since 1956, is tied to climate factors that could mean even worse effects in coming years.

Dangerously hot summer days have become more common across the Midwest in the last 60 years and the region will face more potentially deadly weather as the climate warms, according to a report issued by the Union of Concerned Scientists on Wednesday.

The report looked at weather trends in five major urban areas - Chicago, Cincinnati, Detroit, Minneapolis and St. Louis - and smaller cities such as Peoria, Illinois, and Toledo, Ohio.

The report found that the number of hot, humid days has increased, on average, across the Midwest since the 1940s and 1950s, while hot, dry days have become hotter.

Finding relief from the heat has become more difficult, as all the cities studied now have fewer cool, dry days in the summer, and night-time temperatures have risen.

"Night-time is typically when people get relief, especially those who don't have air conditioning," said Steve Frenkel, UCS's Midwest office director. "The risks of heat-related illness and death increase with high nighttime temperatures."

In Chicago, more than 700 deaths were attributed to a heat wave in July 1995. With more extreme summer heat, annual deaths in Chicago are projected to rise from 143 from 2020-2029 to 300 between 2090-2099, the report said.

Across the Midwest, cities and towns continued to restrict water usage for watering gardens and lawns and were trying to save stressed trees with supplemental drip bags.

Reservoir and river levels were low and being watched carefully, with restriction on barge movements along the Mississippi River and on recreational boating.

Wildfires caused by lightning strikes or human carelessness continued to range from a headache to extreme danger.

In Missouri, one of the nation's driest states, the highway patrol said that smoke from grass and brush fires is creating "very dangerous driving conditions" because of limited visibility. Discarded cigarettes were cited as a factor.

"Missouri has already experienced several grass and brush fires triggered by careless handling of ignition sources," the patrol said in a statement.

(Additional reporting by Kevin Murphy, Michael Hirtzer and Sam Nelson; editing by M.D. Golan)

Source: http://news.yahoo.com/u-midwest-drought-fears-worsen-grain-prices-jump-191921587.html

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