THE WATCHLIST:
Argentina’s dry widens, deepens
More of Argentina’s corn and soybean crops sit in dry soils with little prospect of change soon. The dry area is material for the global market, and so will likely support prices.
AUSTRALIA
Australia’s major summer crop regions are set for a better week ahead, but that alone will not be enough to reverse already lower dryland yields.
WORLD
WHEAT
Northern winter wheat crops are largely dormant. Extreme cold last week in the US likely had little crop impact. Forecasters do not expect any threats from extreme cold in the week ahead.
COARSE GRAIN
Argentina’s dry regions are a significant share of world coarse grain production…
OILSEEDS
…as are Argentina’s dry soybean regions.
Southern Summer Crops
More of Argentina‘s summer crop regions are now on The Watchlist. The dry area has spread into a large area that takes in much of the south. The exception is La Pampa and adjacent regions, where useful rain likely falls this week. Crop conditions have already declined in some of these areas. Now declines are likely in the now-larger area. The ‘watch’ covers a global-scale area, so the market will be mindful. Given healthy global supply, the event likely supports prices rather than boosts them.
Brazil’s summer crops continue to enjoy mostly good conditions. Forecasters expect enough rain in most regions, thereby avoiding any extended periods of stress or dryness. Brazil’s far south is arguably an exception. The southern parts of Rio Grande do Sul have become dry over the past fortnight. This region, though, has had excellent moisture through much of the season. And, forecasters are expecting some useful rain next week. That context suggests patience rather than an immediate ‘watch’. Brazil’s soybean crops remain likely to be larger.
Australia’s major summer crop regions suffered extreme heat over the past week or so. Even irrigated crops likely suffered in the conditions. Still-developing dryland crops likely saw yields decline. Forecasters expect lower, but still hot, temperatures over the next week. The forecasts also contain useful rain for some areas. The context is better, but the best case for dryland crops is that yields stabilise if these conditions continue. A return to drier weather would likely further reduce dryland yields. The market impact is likely material in Australia, but dryland production is not large enough to impact the global market.
Northern Winter Crops
Northern winter crops are mostly dormant. The main risk to crops remains extreme cold weather. The US’s extreme cold event last week likely damaged some crops, but it is unlikely to be widespread. Crops had useful snow cover in most of the coldest regions. Any actual damage is difficult to quantify until crops have started to grow again. The extremely cold weather in the US will now dissipate. Forecasters do not expect extreme cold in regions without snowcover.
Southern Winter Crops
Monitoring will resume in the southern autumn.
Northern Summer Crops
We’ll resume monitoring in the northern spring.
