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BY GEORGE: Corn to Barges

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.

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.

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.

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.

The most extensive drought in five decades has left corn plants withered and dying, and crop yields in the largest producing states will be much lower than experts have forecast.

Only 118 bushels per acre (bpa) are likely according to officials after surveying 49 fields in Iowa, Illinois, Indiana and Ohio. That was sharply lower than a U.S. Agriculture Department estimate earlier this month of a yield of 146 bpa.

In the No. 1 corn and soy state of Iowa on Friday, federal scouts estimated the state's yield at 146 bpa, down 16 percent from the average of 174.7 bpa from last year.

And what about the shipping lanes down the “mighty” Mississippi?   Well, it’s not so “mighty” this year, that’s for sure.

For example, an average of 850,000 tons of grain is shipped from the Lake Providence Port in Louisiana annually during harvest season, but bumper crops of corn and soybeans are expected from northeastern Louisiana farmers, which could have pushed that amount above 1 million tons.  But port officials said currently can't load barges because of low water levels on the Mississippi River.

The river stage at Vicksburg, Miss., was 1.8 feet Saturday. The average river level in July at Vicksburg is about  22 feet.

Also, dry times along the Mississippi River are crimping barge traffic and starting to curtail operations at the Port of Memphis, officials say.

A public barge terminal operated by Kinder Morgan on Presidents Island has been temporarily closed since late June, with some operations moved to deeper water at the Port of West Memphis.

Under restrictions negotiated between Coast Guard and river industries, towboats are pushing smaller groups of lighter barges in the lower Mississippi.

The largest barge line, Nashville-based Ingram Barge, says low water on the Mississippi, Ohio and tributaries has cut its shipping volume by about 40 percent and threatens to do more damage as the rivers recede.

It will ultimately add to shipping costs, producing ripples throughout the economy in the form of higher prices for corn, soybeans, coal, sand and other commodities that travel by barge.

A prolonged drought in the Mid-South and upstream has brought the Mississippi down 53 feet from its near-record peak in May 2011.

By: George Elliott