THE WATCHLIST:
Brazil’s dry season, at last, ends
Rain in Brazil likely douses disquiet about soybeans. And, will rain forecasts for Ukraine and southern Russia persist?
AUSTRALIA
Australia’s winter crop prospects remain sound, but we now have a watch on the west.
WORLD
WHEAT
Wheat now has several watches in place. Ukraine and Russia remain the largest, but there are tentative forecasts for rain next week. The other watches are in Australia, Europe and the US.
COARSE GRAIN
Coarse grain continues to have a few modest worries, but they will ripple markets at most for now.
OILSEEDS
Oilseeds see the biggest change. Brazil’s centre-west and centre-east likely see enough rain to start the world’s biggest soybean crop.
Southern Winter Crops
Australia’s winter crop regions will mostly continue to have enough soil moisture. There are a couple of exceptions, but they are unlikely to cut crop forecasts for now.
Crops further into Western Australia’s interior are an emerging issue. To date, the further interior’s soil moisture has declined to marginal levels. Forecasters expect little rain and warm temperatures for the next week or so. That combination will rapidly cut soil moisture, so this area is now a ‘watch’. The potential impact depends on these crops’ phase. Many crops are likely still developing, so a hot, dry period could reduce yields. That lower yield outcome is not certain – the dry period would need to be longer than a few days. Weather models, for the subsequent week, are projecting some rain in this region that might end the dry period.
The other is an existing exception in the southern interior. Here, crop yields will likely continue falling. This issue is likely largely reflected in current crop estimates.
Argentina’s winter crop regions mostly have adequate or better soil moisture. Some minor areas in the west are on the dry side. Crops elsewhere are thriving, though, making overall crop downgrades unlikely.
Brazil’s winter crop harvesting continues. Forecasters expect further substantial rain in the region, likely continuing to slow maturing and harvesting. This soggy period has now gone on long enough to prompt concerns about crop quality. Crops remain very likely to be large.
Southern Summer Crops
Southern summer crop planting is quickening. A La Niña context remains the consensus but it does seem to be developing more slowly than expected. So, The Watchlist will continue to err on the side of caution, lowering the threshold to applying a ‘watch’.
Australia’s summer crop regions are mostly dry. Weather forecasters expect useful rain in some of the region this week. Outside of south-central Queensland, though, the context for dryland crop planting is poor. We are early in the season, though, so time remains for moisture to accumulate.
Argentina‘s growers are well into the corn planting window. And soybean planting is now ramping up. Most corn regions will likely continue to have good or better soil moisture. Exceptions remain in the west and north. Forecasters expect some rain here next week, but it is uncertain how much that rain will raise soil moisture. So, these regions remain a ‘watch’ but are not yet near a crop downgrade. The overall picture suggests normal corn crops in Argentina.
Brazil’s dry soybean and first-crop corn regions likely take a wetter turn. In the south, moisture remains abundant or possibly too abundant. The centre-west and centre-east, though, are dry now. Forecasters expect that to change with substantial rainfall over the next fortnight. The forecast rain will likely raise soil moisture materially. These regions are, therefore, ‘unwatched’. This rain dissolves most worries about widespread late-planting of soybeans.
Northern Winter Crops
Parts of western Europe now have a ‘watch’ because dry conditions likely persist for at least another week. Much of France and Spain’s winter crop regions have now been dry for much of October. Weather forecasters do not expect the likely rain to materially raise soil moisture. That context means non-irrigated crops emerging poorly, if at all. These areas will need rain by the end of the month; otherwise, crop downgrades become likely.
A watch remains on substantial chunks of Ukraine and Russia. Forecasters expect some rain in the region this week. That rain is unlikely to be enough to extinguish the watch. Forecasters are, though, somewhat confident of greater rainfall the following week. Those forecasts can still evolve substantially, so the watch remains. However, the forecast rainfall would likely be enough to mollify worries about these regions.
US White Winter wheat regions remain a watch. Forecasters again expect a little rain in parts of the region. The resulting soil moisture gains are likely modest and brief. As will the replenishment of irrigation reservoirs. The region needs rain by the end of October. Otherwise, early crop development is going to be at best poor, if not nonexistent. At that stage, lower crop forecasts become more likely. The region produces about 15-20% of US wheat. So, a downgrade would have to be large to have a substantial market impact.
Northern Summer Crops
Summer crop harvesting is nearing an end in many places. Forecasters expect little sustained weather interruption in most regions. China is the likely exception, where heavy rain may interrupt harvesting for a period. Weather-driven changes to crop forecasts are unlikely.
