THE WATCHLIST:
Wheat worries, real and imagined
US HRW wheat crop cuts are real. El Niño problems for Australian wheat are still imagined – for now. Australia’s May rainfall forecasts might change that.
AUSTRALIA
Australia’s winter crop regions remain mostly dry. Forecasters do not expect enough rain to change that status over the next week or so. The dryness is not unusual because rainfall is usually modest until the end of April. Markets will thus have few worries – for now. As more of May enters the forecast horizon, rainfall forecasts will start to matter more. The transition to an El Niño adds an extra element to the forecast watch. Lighter May rainfall would be an early sign that El Niño is having an impact.
WORLD
WHEAT
Most northern winter crops continue to have adequate soil moisture and are likely in good condition. Australia has begun planting winter crops. Market focus on rainfall forecasts will increase as more of May comes into view.
Yields are likely to continue declining in western US HRW Wheat regions. And the affected area is spreading eastward, covering more of the crop. Weather forecasters do not expect that to change in the week ahead. Analysts are likely to cut their crop forecasts further. The issue continues to lift wheat prices, especially HRW (Kansas) prices. Prospective global wheat supply can absorb these losses. And, US inventories were hefty ahead of this crop. That context likely limits the HRW issue’s price impact on its own. Joined with other – still potential – issues might be enough to raise prices some more.
COARSE GRAIN
No major weather issues for coarse grain for now. Northern summer crop planting has begun, mostly into supportive soil moisture.
OILSEEDS
Oilseeds, similarly, lack any major weather issues for now. Northern summer crop planting has begun with supportive soil moisture.
Southern Summer Crops
Watchlist clear for now.
Northern Winter Crops
Southern Winter Crops
Watchlist clear for now.
Northern Summer Crops
Watchlist clear for now.
