THE WATCHLIST:
Lite
Crop markets have few weather worries, making range- or trend-breaking moves less likely.
AUSTRALIA
Australia’s winter crops remain on track to be large, despite issues in some regions.
WORLD
WHEAT
The wheat ‘watch’ shrinks. Rain in western Europe this week quells concerns there. The ‘watch’ on Ukraine and Russia continues, but the rainfall outlook is trending in the right direction.
COARSE GRAIN
Coarse grain continues without any major worries. Watches in Argentina and Australia are both likely offset by high yields in other parts of those nations.
OILSEEDS
Oilseeds have no major weather issues for now. Markets, though, will continue to watch Brazil’s weather closely to confirm the somewhat wetter trend.
Southern Winter Crops
Australia’s winter crops mostly remain on a path to strong yields. The exceptions are likely to be made up for by good performance elsewhere.
Crops further into Western Australia’s interior are now an ‘alert’. Soil moisture, as expected, declined sharply last week. Forecasters expect little rain in the coming week, so that is unlikely to change. For still-developing crops, the dry period likely can reduce yields. Crops in the rest of WA are likely to produce strong yields, likely meaning overall crop totals will not fall. GIWA’s October crop report confirms that impression.
In good news, losses in the southern interior likely come to an end this week. Forecasters expect useful rain through much of the region this week. Some crops can likely still benefit from the rain, arresting the yield decline.
Most of Argentina’s winter crop regions will likely continue to have adequate or better soil moisture. Some minor dry areas in the west are due to “some” rain this week. Whether that rain will be sufficient is unclear. Nonetheless, crops elsewhere are thriving, making overall crop downgrades unlikely.
Brazil’s winter crop harvesting continues. Forecasters expect a welcome, drier week. That context will allow for maturation and harvesting. And will pause concerns about crop quality. Large crops remain very likely.
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 mixed. Parts of Queensland received useful rain last week, providing a timely boost for dryland crops. Weather forecasters expect little rain in these regions for another week or so. This early in the season, though, means that time remains for moisture to accumulate.
Argentina‘s growers are well into the corn planting window. Most corn regions will likely continue to have good or better starting soil moisture. The exceptions remain in the west and north. Forecasters, again, expect some rain here over the next week or so. How much the rain will raise soil moisture is uncertain, so these regions remain a ‘watch’. This early in the season, crop downgrades are unlikely. And, good conditions in most places suggest a greater chance of crop upgrades.
Brazil’s dry soybean and first-crop corn regions took a better turn last week. In the south, moisture remains abundant. The centre-west and centre-east did see some rain. That rain was not enough – more is needed. Forecasters expect substantial rainfall this week. The forecast rain will allay any worries near-term. The vibe, importantly, is that the dry season has ended. The market, though, will continue its weather vigil.
Northern Winter Crops
The ‘watch’ on parts of western Europe proved to be a one-week worry. Fortecasters expect most of France and Spain’s winter crop regions to get useful rain over the next week or so. That rain is likely to materially raise soil moisture, giving crops there a much-needed start.
A watch remains on substantial chunks of Ukraine and Russia. Last week saw a little rain in some parts of the region. Forecasters expect more rain over the next week or so. This rain is not quite enough to quell disquiet, but the direction is much better. And, chances are, the context will look better, but not ideal, after this week. Markets will, nonetheless, continue to watch how rainfall forecasts evolve.
US White Winter wheat regions saw a little rain last week. Forecasters expect more this week to reach some of the driest parts of the region. The region remains a ‘watch’ for a couple of reasons. One, the soil moisture gains might be modest. And, two, this long period of unusually low rainfall means irrigation reservoir levels are well below normal. Both are cause for concern. And, with late October coming onto the forecast horizon, the clock is ticking louder.
Northern Summer Crops
Summer crop harvesting will continue to progress quickly in many places. Forecasters expect little sustained weather interruption in most regions. Parts of China might again see interruptions to harvesting, but not in major soybean regions. Weather-driven changes to crop forecasts remain unlikely.
