After long-term weather outlooks have shown more clement weather could be on the way for the United States’ parched Midwest, rallies which saw record prices reached in grain markets this week have eased a little.

At the beginning of the month, analysts from the UN Food and Agriculture Organisation suggested that the United States drought, along with residual weather conditions which are still causing problems elsewhere, meant rises in food prices were likely this month and that these would affect the world’s poorest most severely. Nevertheless, one of the organisation’s expert economists expressed surprise and concern at the speed and severity of the market reaction last week.

As long-term forecasts suggest more crop-friendly weather may be in store for the Midwest in early August, maize and soybean futures have fallen over the past two days. The milder conditions are set to benefit late planted maize, though this may prove too late for earlier maize, which will have already pollinated by the time conditions improve. Last week, rising temperatures and poor weather outlook led to prices for the staple grains reaching record highs.

The United States is currently suffering under the most severe and widespread drought since the 1950s, which is causing serious problems for production of principal crops, most notably maize and soy. The government last week declared the situation a natural disaster in a bit to speed up relief work.

Although improved weather may be on the way, for now conditions in the affected regions of the United States remain hot and dry. The situation has taken a marked toll on both soy and maize crops, which have seen yield estimates and condition assessments downgraded repeatedly in recent weeks.

Furthermore, although weather may ease conditions for the crops, the affected regions are expected to remain in drought. On Thursday, the U.S. government National Oceanic and Atmospheric Administration (NOAA) announced that the affected areas are likely to remain in drought for at least the rest of the summer.

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