THE WATCHLIST:
Too much heat for HRW wheat
Some US HRW wheat crops face a tough week. And somewhat lower corn and soybean yields are likely in Argentina. Both are supportive of prices, but are likely to be easily absorbed by prospective global supply.
AUSTRALIA
ABARES last week confirmed the hefty fall in Australia’s summer crop yields we have been tracking for some time. Yields for still-developing dryland crop yields are likely to continue declining. Many crops, though, are either maturing or being harvested, limiting further downgrades.
Australia’s winter crop planting will start in April. The majority of Australia’s winter crop regions are currently very dry. Forecasters do not expect that to change much in the east or west in the week ahead. Southern areas are likely to get some rain. The seasonal swing to wetter weather is on the edge of the forecast horizon. The market will focus on rainfall forecasts as more of April is within the horizon.
WORLD
WHEAT
Northern winter wheat crops are starting to break dormancy. Most crops are likely to remain in good condition. Some US HRW Wheat regions have been an exception for some time. These western HRW regions will likely continue to have little or no soil moisture. Importantly, forecasters expect high temperatures over the next week or so in this region. That means analysts are more likely to cut crop forecasts, so we have upgraded the region from ‘watch’ to ‘alert’. The issue is large enough to support wheat prices, especially HRW. Global wheat supply can absorb any likely losses, especially given crop conditions elsewhere.
COARSE GRAIN
Some of Argentina’s corn regions are more likely to see lower yields. These areas, from Buenos Aires and north into Entre Ríos, have had limited to no soil moisture for some time. Forecasters do not expect enough rain to boost soil moisture over the next week or so. Analysts are thus still likely to cut crop forecasts modestly. The cuts would be material in global terms, but come in a context where global supply can absorb those losses. Any global price impact will thus be modest and likely difficult to discern among other influences.
OILSEEDS
Soybeans in the same regions of Argentina are also likely to suffer. Analysts are likely to cut crop forecasts somewhat. The cuts would be material in global terms, but the global supply context can absorb those losses.
Southern Summer Crops
Northern Winter Crops
Southern Winter Crops
Monitoring will resume in the southern autumn.
Northern Summer Crops
We’ll resume monitoring in the northern spring.
