Drought pares U.S. corn and soy harvest, say traders

With the fall harvest getting under way, traders expect the USDA to trim its estimate of the U.S. corn crop by more than a quarter-billion bushels on Monday but to stick to its forecast of the largest soybean crop ever, at roughly 4.5 billion bushels. Dry weather in the western Corn Belt, including powerhouses Iowa and Nebraska, will lower corn production to just below 14.1 billion bushels, or 1 billion bushels less than last year, according to the average estimate from traders surveyed by wire services.

• READ MORE: Warm September lowers early frost risk In the Corn Belt

Corn and soybeans are the two most widely planted crops in the United States. Wheat is third. The three crops are the foundation of the U.S. food supply. They are used directly as ingredients in food and as rations for livestock for meat, eggs and milk. Although this year's corn and soybean crops will be smaller than the 2021 harvests, they are likely to be about the same size as the 2020 crops.

The smaller corn crop would translate into tighter supplies and could bolster the season-average corn price, currently projected at a near-record $6.65 a bushel. The record is $6.89 a bushel, in the drought-shortened 2012 crop. At present, the soybean crop is forecast to fetch an average $14.35 a bushel, 5 cents less than the record, set by the 2012 crop.

Commodity prices, already strong, surged to high levels following Russia's invasion of Ukraine.

The USDA will release the crop report at noon ET.