Core Insights - The latest USDA drought report indicates that significant drought conditions are affecting major agricultural regions in the U.S., with moderate to severe drought levels reported as of June 3, 2025 [1] Grain Sector - Durum Wheat: 41% of the production area is affected by drought, a decrease of 38 percentage points from the previous week but an increase of 36 percentage points from the same time last year [3] - Spring Wheat: 19% of the production area is affected by drought, down 10 percentage points from the previous week and up 16 percentage points from last year [4] - Winter Wheat: 12% of the production area is affected by drought, down 4 percentage points from the previous week and down 4 percentage points from last year [5] - Corn: 21% of the production area is affected by drought, a decrease of 2 percentage points from the previous week and an increase of 19 percentage points from last year [6] - Soybeans: 16% of the production area is affected by drought, down 1 percentage point from the previous week and up 15 percentage points from last year [7] - Barley: 24% of the production area is affected by drought, down 4 percentage points from the previous week and up 17 percentage points from last year [8] - Sorghum: 15% of the production area is affected by drought, down 7 percentage points from the previous week and down 30 percentage points from last year [9] - Rice: 2% of the production area is affected by drought, down 1 percentage point from the previous week and down 5 percentage points from last year [10] Economic Crops - Cotton: 6% of the production area is affected by drought, down 1 percentage point from the previous week and unchanged from last year [11] - Peanuts: 2% of the production area is affected by drought, unchanged from the previous week and last year [11] - Sunflowers: 8% of the production area is affected by drought, down 12 percentage points from the previous week and up 5 percentage points from last year [11] - Sugarbeets: 21% of the production area is affected by drought, unchanged from the previous week and up 21 percentage points from last year [11] - Sugarcane: 49% of the production area is affected by drought, unchanged from the previous week and down 1 percentage point from last year [11] Livestock and Feed - Hay: 19% of the production area is affected by drought, down 1 percentage point from the previous week and up 12 percentage points from last year [12] - Alfalfa Hay: 27% of the production area is affected by drought, down 3 percentage points from the previous week and up 17 percentage points from last year [12] - Cattle: 21% of the herd is located in drought-affected areas, down 2 percentage points from the previous week and up 11 percentage points from last year [12] - Sheep: 25% of the herd is located in drought-affected areas, down 1 percentage point from the previous week and up 17 percentage points from last year [12] - Milk Cows: 15% of the herd is located in drought-affected areas, down 3 percentage points from the previous week and up 10 percentage points from last year [12] Analysis and Outlook - The drought conditions are expected to significantly impact major crops like corn and soybeans, which are crucial for both domestic and global markets [15] - While cotton's economic impact is relatively minor, the drought could still affect related industries [15] - The drought's effects on livestock, particularly cattle and sheep, may lead to increased production costs in the livestock sector [15] - Other crops such as barley, sorghum, sugarbeets, and sugarcane are also experiencing drought impacts, which could disrupt global supply chains [16]