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Drought cuts crops below year-earlier levels for 1st time since '74

CHICAGO -- 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 probably will 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.

Record heat in June and July sparked the worst drought since 1956, sending corn and soybeans prices to record highs.

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