KANSAS CITY — Summer grain and oilseed planting in South America is moving along aggressively with improvements in soil conditions noted in Argentina over recent weeks ending a frighteningly dry start to the growing season. Now, so it seems, South America and many other areas around the world are on the fast track toward good production and nothing is standing in the way. World Weather, Inc. has identified a hiding lighter-than-usual weather bias that soon will have influence on South America weather raising a little market attention for a while in December and January.
Brazil rainfall already has had a lighter-than-usual bias in recent months. The nation usually gets far more rain than it needs to sustain crops and since this is the planting season for corn and soybeans no one has really paid the lighter-than-usual bias much attention. As long as soil moisture is favorable for planting and crop development, all is well.
Similar years in the past also have brought on a good start to the growing season, but as the jet stream shifts to the south, as it normally does in the summer, some of the timeliness and vigor in rainfall may be reduced and that change will open the door for some faster drying between rain events and pockets of dryness will pop up in interior southern Brazil, Paraguay, Uruguay and a part of eastern Argentina. This will first be noted in December with late December and early January the most favored time for the precipitation to become more notably lacking, raising concern over crop stresses as reproduction approaches.
In each of the three analog years there was a slightly different conclusion to the summer production in Brazil, but each year had at least a small reduction in yield. Two of the years experienced a more extended period of below-average rainfall from late spring into the heart of summer resulting in lower yields and the third year experienced below average precipitation throughout the summer, but rain continued well-timed enough to prevent any huge reductions in production.
World Weather, Inc. is leaning toward a little loss in yield from interior southern Brazil and some crop areas west into eastern Argentina. However, this should not be a critically dry situation, but one that will take a little air out of the bullish production balloon that has been launched for Brazil in 2014. It is too soon to determine how significant the impact may or may not be, but the ideal conditions present in mid-November may not continue beyond the first half of December in some areas.
Crop damage raises oil concern
In the meantime, the recent calamity associated with Super Typhoon Haiyan in the Philippines has raised much worry in the commodity trade that a great shortage of coconut oil and byproducts will occur in the next few years after the devastation in the central Philippines. Losses have certainly occurred and where the storm was most intense there were complete losses in production.
A little coffee, cocoa and sugarcane also was lost through the storm, but relative to the world’s total production it may be found out that eastern portions of the central Philippines likely will report the largest devastation. Production from the main islands of Mindanao and Luzon was unaffected by the typhoon and that should place a cap on the production cut.
Haiyan went on to produce heavy rain in northeastern Vietnam and southern China earlier this month. In the meantime, heavy rain occurrences and some damage also occurred in central Vietnam from another tropical weather system, named Podul. Portions of Indonesia and Malaysia also experienced some heavy rain and local flooding recently.
World small grains
From a small grains perspective, weather around the world has improved greatly from the horrific production years of 2010, 2011 and 2012. Problems in small grain production areas today are limited to a few dryland wheat production areas in east central China and ongoing dryness in the southwestern U.S. Plains.
Late planted crops in Russia and Ukraine were treated to an unusually warm period of weather in late October into the first half to two thirds of November, allowing fieldwork to be completed after too much rain in September. The warmth not only supported late planting, but gave a few crops in the far south a better chance for emergence and establishment before dormancy set in.
Recent assessments of the freeze events in Australia during October have verified damage and cuts in production suggested for the region are expected. The impact of losses in Australia may be countered by another good production year in India and improved spring production potential in parts of Russia and Ukraine in 2014. Canada collected its record grain crop recently and is getting sufficient early season snow to leave hope for favorable spring moisture in 2014.
Drought in the southwestern U.S. Plains is not budging and it probably will not change much until late winter and spring when some improved potential for rain and snowfall begins.
Small grain crops are now dormant or semi-dormant in Canada, the northern U.S. Plains, much of the western Commonwealth of Independent States, northeastern Europe and China’s Yellow River Basin. Planting is still advancing in some of the warmer lower latitude production areas, including Spain, northern Africa, Turkey and the remainder of the Middle East. Out of these areas just mentioned the regions needing rain most are in Morocco, central and southern Spain and Turkey. There is still time for these areas to experience improved precipitation.
The same pattern that eventually will bring bitter cold air into the heart of the central and eastern United States later this autumn and winter also will bring better rainfall to the Mediterranean Sea countries. Dryness during the planting season in Morocco, Spain and Turkey should give way to greater mid- to late-winter precipitation.
El Niño chatter
The only other global weather issue that has surfaced recently is the rumors of El Niño developing. As of this writing that forecast is just a rumor. Subsurface ocean water temperatures in the eastern equatorial Pacific Ocean are warming significantly, but the phenomenon seems to be associated with an ocean wave that is generating the warm up and not necessarily from the same trends that support El Niño evolutions. Because of this lesser known fact, much caution is advised before a commitment to El Niño is made. If ocean temperatures warm additionally over the next few weeks there will be an El Niño-like flavor to world weather patterns during the winter, but a full blown El Nino event is not presently anticipated.
El Niño events that occur in the Northern Hemisphere spring and summer tend to bring more moisture into the U.S. Midwest Corn Belt while rainfall is below average in Australia, Indonesia, Malaysia, South Africa, India and mainland areas of Southeast Asia. An El Niño event in 2014 would certainly raise some commodity market trade concerns for next year, but it really is too soon to buy into the forecast right now. The situation certainly should be closely monitored.
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