Drought Prompts USDA to Slash Crop Estimates; Agriculture: The turnaround is the most dramatic for corn and soybeans; bumper crops had been expected. Futures prices jump. By CHARLES ABBOTT, REUTERS Brutal drought in the American Grain Belt, part of a downturn in crops worldwide, will bring the smallest U.S. corn and soybean harvest since the mid-1990s, the government said Monday, whipping a price stampede that could run far into next year. U.S. crops might shrivel more without relief from a drought that has gripped one-third of the nation. The U.S. Department of Agriculture reported crop losses on every continent, ending a remarkable five-year run of large crops globally. Smaller crops would have no immediate effect on U.S. consumer food prices, now running a modest 2.4% higher than last year. But private consultant John Schnittker foresaw "market tension" for the next 18 months to find enough grain and oilseeds for food, livestock feed and industrial use. Food makers will pay more for grain for at least 15 months. "We absolutely have to have good crops in 2003. Any further reduction will send prices sharply higher," Schnittker said. The forecast sent corn and wheat futures contracts in Chicago rocketing to five-year highs. Soybeans hit a four-year high. Near-term corn futures jumped to nearly $2.61 per bushel, up from about $2.50 on Friday. Near-term wheat futures surged to nearly $3.52 per bushel, up from $3.445 on Friday. Soybeans for delivery in November ended the day at $5.5275 a bushel, up a whopping 27.5 cents. "The stage is set for some pretty high prices," said Keith Collins, the USDA's chief economist. "Right now, things look like we are going to have a much tighter market for the 2002 crop year and into the 2003 crop year as well." Surpluses amassed in the nation's warehouses during the global grain glut could be depleted quickly.:
