THE WATCHLIST:
A Light Sprinkle
A couple of modest concerns for Brazil’s soybeans and Argentina’s corn join similarly modest US wheat worries.
AUSTRALIA
Australia’s winter crop harvesting likely continues with little weather interruption. Summer crop regions likely get more rain, but again not enough in some places.
WORLD
WHEAT
A couple of US winter wheat issues remain, but are likely not large enough to have much market impact.
COARSE GRAIN
Argentina’s north-west has been too dry for too long. This area warrants a ‘watch’. But the crop risk, for now, is not large enough to have much market impact.
OILSEEDS
North-east Brazil is, again, likely to miss rain events, adding a modest amount of soybeans to The Watchlist. The market will likely be mindful of the issue, but the market impact will be limited for now.
Southern Winter Crops
Australia’s winter crop harvesting is likely to proceed uninterrupted in most places. Rainfall is unlikely to create any substantial quality concerns.
Argentina’s winter crops are increasingly at their maturing and harvesting phases. Therefore, the weather threats to crops are more about rain reducing quality or cold snaps. Both are lower probability events, so crop risk has declined. Argentina’s crops are thus very likely to match high forecast levels.
Brazil’s winter crop harvesting continues. Forecasters expect drier weather in Rio Grande do Sul to dull any worries about crop quality or harvesting interruptions.
Southern Summer Crops
Most of Brazil’s soybean and first-crop corn regions are likely to have enough soil moisture. The dry north-east is an exception. This region has benefited very little from the recent rain events. And, forecasters expect rain events to miss the region again this week. The dryness risks either damage to very young crops or problematic planting delays in these regions. Thus, the region is on ‘watch’. The region accounts for a small share of Brazil’s soybean production, and an even smaller share of corn. Market impact is thus likely to be minimal for now, but Brazil’s importance means the issue will not be ignored.
Australia’s summer crop regions are mixed, including substantial areas that are too dry. Last week’s rainfall was useful in some of northern NSW, but had less impact on soil moisture elsewhere. Weather forecasters expect useful rain in almost all summer crop regions over the next week or so. These forecasts are comforting, but forecasts have overpromised and underdelivered recently. Dryland crop regions need rain soon to get a good start.
Argentina‘s corn and soybean regions mostly have enough soil moisture to start crops well. The central-west and north-west have much less moisture. Forecasters expect some rain in both regions over the next week or so. The issue now is that evaporation rates are seasonally rising, raising the bar for required rainfall. The north-west, in our view, has spent too long with low moisture. So, this region has a ‘watch’. The central-west might join the ‘watch’ if rainfall is short of forecasts. The corn production in the ‘watch’ region is modest, so the market impact will likely be minimal for now. For soybeans, now is a little early to become worried.
Northern Winter Crops
Two US winter wheat regions remain a watch.
The western edge of the US Hard Red Winter Wheat region has been too dry for some time. Forecasters expect a little rain in the region this week. Whether that raises soil moisture much is unclear. Crop condition is likely to continue deteriorating. The chances of lower crop forecasts here are growing. However, the rest of the HRW wheat region has abundant soil moisture, suggesting large crops. The net impact on forecasts, for now, might be positive.
US White Winter wheat regions also continue to face issues. Dryland crops in central Oregon and central Washington are likely losing yield. The rest of the region remains close to that point. Irrigated crops are also at risk here. Months of unusually low rainfall mean irrigation reservoir levels are well below normal.
Winter crop regions in Ukraine and Russia remain somewhat patchy. Many regions have enough soil moisture to support early crop development. Other areas have limited moisture, but are not yet problematic. Forecasters do not expect that to change much over the next week or so. China‘s winter crop regions are likely to continue to have good soil moisture. As will much of Europe. France and Spain are currently on the dry side, but have improved marginally. Forecast rain is likely to alleviate that further in both nations over the next week or so.
Northern Summer Crops
Remaining summer crop harvesting is likely to proceed smoothly. Forecasters expect no more than sporadic interruptions to that harvesting. Weather-driven changes to crop forecasts are now highly unlikely.
