Drought cuts U.S. crops below demand

Drought damage to corn and soybean fields in the United States, the world's top grower and exporter, is eroding supplies of the nation's two largest crops to below year-earlier consumption levels for the first time since 1974.

The government is expected to say today that the U.S. corn harvest and inventories on Sept. 1 will be a combined 11.604 billion bushels, less than the 12.33 billion consumed and exported last year, according to a Bloomberg survey of 31 analysts. Soybean supplies will be 2.932 billion bushels, below the 3.157 billion used in 2011. Supplies failed to top usage from the previous year only twice since 1960 for corn and five times for soybeans, U.S. Department of Agriculture data show.