The United States plays a critical role in global markets for both feed grains and oilseeds. The United States is the world's leading producer and exporter of both corn and soybeans. In 2007 the United States had 42% and 63% shares, respectively, of world corn production and trade, and 32% and 41% shares of world soybean production and trade. As a result of this dominant role, unexpected changes in U.S. production for either corn or soybeans, such as those stemming from the Midwest floods of 2008, can have a major impact on both U.S. and global commodity markets. During the first half of 2008, U.S. and world agricultural markets for most grains and oilseeds experienced tight supplies and record high prices. The high prices provided a tantalizing incentive for U.S. farmers as they prepared to plant their crops this past spring. In contrast, the dramatic, unexpectedly sharp price increases of the past year have raised costs for livestock feeders and agricultural processors, evoked considerable concern about consumer food-price inflation and international food aid availability, and sparked a global debateâreferred to as the "food versus fuel" debateâabout the increasing policy trend of dedicating commercial agricultural crops to biofuels production, particularly corn used for ethanol. Against this backdrop of producer anticipation and consumer angst, substantial new concerns emerged by late June about potential weather- and flood-related production losses to this year's U.S. corn and soybean crops. Widespread, good growing conditions have persisted since the floods adding to the uncertainty over crop production prospects. The Corn Belt is a 13-state region located in the Midwest where corn is the predominant cash crop ( Figure 1 ). It stretches from Ohio through Indiana, Illinois, Iowa, northern Missouri, southern Wisconsin, and Minnesota to the eastern fringe of the Great Plains states of North and South Dakota, Nebraska, and Kansas. The Corn Belt also includes parts of Michigan and Kentucky. Since 2000, these 13 states have accounted for 89% of U.S. corn production ( Table 3 ). Iowa and Illinois, in the heart of the Corn Belt, are the two leading corn-producing states with a combined production share of 36%. Similarly, 88% of U.S. soybean production occurs in the 13 Corn Belt states, with Iowa and Illinois again the two leading producers with a combined share of 32% ( Table 4 ). On August 12, 2008, USDA released the first survey-based forecast of corn and soybean production for 2008. According to USDA's forecast, U.S. farmers will produce the second largest corn crop on recordâ12.3 billion bushelsâup about 5% from the previous month's forecast, but down over 6% from the 2007 record crop. USDA's soybean production forecast of nearly 3 billion bushels is unchanged from the July forecast, but up 15% from 2007. These production forecasts reflect three factors. First, flood-related acreage losses appear to be substantially less than initially projected. Second, nearly ideal growing conditions that have persisted across the Corn Belt since late June have contributed to sharp increases in USDA's yield outlook for corn, thus, offsetting flood-related area losses. Third, despite a 17.6% increase in planted acreage in 2008, soybean production is flat due to a diminished yield outlookâlargely due to the lateness of the crop's planting and development, as well as dry conditions in the Delta, the Southeast, and the Northern Plains. USDA's August crop production forecast appear to have calmed much of the market concern regarding crop losses due to flooding. However, a large portion of the 2008 corn and soybean crops were planted late and, as of early August, remain substantially behind historical development rates. As of August 11, USDA estimates that 30% of corn had reached the dough stage of development compared with the 5-year average of 50%, while only 6% had dented compared with an average of 16% the past five years. Similarly, 60% of soybean plants had set pods compared with the 5-year average of 75%. As a result, market analysts suggest that weather problems could still emergeâsuch as an early freezeâthat could lower yield and production prospects, especially in the more northerly regions where crop development remains behind normal. USDA's August crop production forecasts reflect growing conditions as of August 1, and incorporate survey data from the flood-affected regions. The yield estimates are based on objective field surveys while the planted and harvested acreage estimates are usually drawn from the June Acreage report. However, most of the survey data for the Acreage report was collected during the first two weeks of June prior to the worst flooding. In response to the changed circumstances, USDA conducted an extensive re-interview of producers' harvesting intentions in mid-July, in the flood-affected areas of Illinois, Indiana, Iowa, Minnesota, Missouri, and Wisconsin, to supplement the earlier survey data in deriving estimates of abandoned and harvested acres. USDA stated that under a return to normal weather conditions, by mid-July most flooded fields would be dry and affected farmers would be better able to assess their options. Data obtained from the mid-July re-interviews were incorporated into USDA's August 12, 2008, Crop Production and WASDE reports. USDA estimates 2008 U.S. planted and harvested corn area of 86.977 and 79.290 million acres, respectively. This compares with the June Acreage estimates of 87.327 million and 78.940 million acres ( Table 1 ). Thus, planted corn acreage has been revised downward 350,000 acres, while harvested acreage was raised by 350,000 acres. Planted area losses occurred primarily in the flood-affected states. Harvested area gains occurred primarily in states outside of the flood regions and is reflected in below-average abandonment rates. High market prices appear to be encouraging farmers to make every effort to harvest more marginal areas that are traditionally abandoned or grazed off by livestock. USDA estimates 2008 U.S. planted and harvested soybean area of 74.783 million and 73.341 million acres, respectively. This compares with the June Acreage estimates of 74.533 and 72.121 million acres ( Table 2 ). Thus, planted soybean acreage has been revised upward 250,000 acres, while harvested acreage was raised by 1,220,000 acres. In contrast to corn, soybean harvested area gains occurred primarily in the flood-affected states. USDA's August estimate of 2008 corn yields was 155 bushels per acre. If realized, this would be the second largest on record behind the 160.4 bushels per acre achieved in 2004. Clearly, excellent weather since late June has boosted the yield outlook. Just a month earlier, in July, USDA had forecast national average corn yields at 148.4 bu./ac. due to the combined effects of slow planting progress, unusually slow plant emergence, and the flooding. Final yields may still vary based on growing conditions through the remainder of the growing season. USDA updates its crop production and market supply and demand estimates monthly. USDA's August estimate of 2008 soybean yields was 40.5 bushels per acre. If realized, this would be down nearly 2% from last year's 41.2 and the lowest since 2003. The soybean crop's late development and dryness throughout much of the Southeast, Delta, and Northern Plains appears to be taking its toll. Just a month earlier, in July, USDA had forecast national average soybean yields at 41.6 bu./ac. based on 1989-2007 regional trend analysis adjusted for late planting and emergence. As with corn, final soybean yields may still vary based on growing conditions through the remainder of the growing season. Flood-related crop damage assessments generally are made by county and state officials in the affected regions. However, a rough approximation of flood-damaged acres can be obtained by comparing the implied state-level abandonment rates from USDA's August forecasts with the recent eight-year average abandonment rates. If one attributes any change from the 8-year average entirely to the flood, then the data suggest that about 889,000 acres planted to corn and intended for harvest were lost in Iowa (453,000), Illinois (236,000), Indiana (102,000), and Missouri (99,000)âsee Table 1 . This "lost" area estimate represents about 1% of the 87.0 million acres planted to corn in 2008. However, projected below-average abandonment rates throughout the remainder of the Corn Belt, particularly in Nebraska, Kansas, South Dakota, Ohio, and in lower-yielding non-Corn Belt states more than offset the lost acres. Applying USDA August yield forecasts to the area-loss calculations suggests that the four major flood-affected states of Iowa (77.5 million bushels), Illinois (40.6), Indiana (15.8), and Missouri (14.4), cumulatively account for 148.2 million bushels of "potentially" lost production. This "lost" production estimate represents 1.2% of the 12.3 billion bushel crop estimate announced by USDA. Applying the same abandonment rate methodology to soybeans suggests that projected area loss related to bad weather and flooding amounts to nearly 400,000 acres in the Corn Belt, partially offset by 184,000 acres of below-normal abandonment in non-Corn Belt states ( Table 2 ). This "lost" area estimate represents about 0.2% of the 74.8 million acres planted to soybeans in 2008.