Positive, crop rider, the pattern is clear

Weather worries remain few.

AUSTRALIA

Australia’s winter crop production estimates are unlikely to change. The south-east likely sees some harvest disruption from rain. The disruption might cause a few basis ripples there. Australian prices though likely remain on a harvest trajectory. This season, that trajectory is unlikely to disconnect local and global prices.

WORLD

The Watchlist remains very light on. South America’s summer crops regions are at least a week away from any weather worries. This time of year, that means there is no big disturbance on the horizon. That context largely leaves markets to overthink export run-rates.??And me to think about Top Gun.

WHEAT: Cold remains the greatest risk to wheat. Particularly to poorly-established crops in the US, Ukraine and Russia. That risk likely remains latent this week. North Africa’s planting window again being very dry garners attention but now is early days. Neither issue though like has enough oomph to lift prices much

OILSEEDS & COARSE GRAIN: South America’s summer crops looking good. So, neither market?has any substantial weather worries. The one flicker on the radar is Mexico’s corn. Mexico’s northern-third had been bone-dry for months. Fears for corn crops in those regions are well-founded. The major question is one of quantity. Well-supplied coarse grain markets can absorb material losses.

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AUSTRALIA: Rain interrupts harvest play

Australia’s winter crop estimates remain unlikely to change.

• Harvesting is likely to precede without too much interruption around most of Australia.
• The exception is eastern Victoria and adjacent parts of southern NSW.
• Weather forecasters expect substantial rain in this area at times over the next week or so.
• The rain is enough to delay harvesting briefly at least.
• The forecast rain though is not continuous.
• And evaporation remains helpful at this time of year.
• So widespread, material delays are unlikely.
• And the same can be said for any new concerns about crop quality.

Some of Australia’s summer crop regions are entering a dry spell.

• Central-south Queensland did not get much rain last week.
• Weather forecasters are not expecting much rain in that area this week either.
• So, the region will dry down, stressing crops somewhat.
• The rest of the region, south Queensland into north NSW, will likely see a supportive weather pattern.

Australia’s normal harvest price pattern is again unlikely to be much disrupted by weather in the week ahead. Harvesting delays in the east are unlikely to be long enough to more than ripple eastern basis. Thus harvest pressure remains a headwind for prices. But not an unusually strong headwind.

WORLD: Low Snow Blow

Northern winter wheat crops remain at risk from cold snaps. Those crops await snow. South America’s crops are mostly in a good place. Brazil’s soggy south is though a risk to wheat crops.

Southern winter crops

Winter crop regions in Argentina and Brazil are likely to be a little too wet.

• Rain, recent and forecast, is likely to slow maturation and harvesting.
• The impact is likely to be temporary for the most part.
• Some of south Brazil though is at risk of flooding.
• So there is some risk to crop yields and crop quality there.
• The region is thus set to ‘watch’.
• The ‘watch’ region accounts for around a third of Brazil’s wheat production.
• Or, about 1% of global trade (that’s for scale, not because 1% of global exports come from there).
• To make that material, a very large – and so unlikely –production loss would be required.
• So, the event is unlikely to create more than ripples for markets.

Southern summer crops

Brazil’s summer crop regions likely continue in good condition.

• Weather forecasters expect enough rain this week to keep crops in good condition.
• Again, any weather worries are a week or more away.

Argentina’s summer crop regions likely remain okay or better.

• Weather forecasters expect enough rain to mean worrisome crop stress is unlikely.
• And, here too, any worries are a week or more away.

Northern winter crops

Northern winter crop worries remain limited to unlikely cold snaps.

Ukraine and Russia will continue to have large areas of winter crops that are vulnerable to cold.

• These crops are poorly-established because of the dry autumn.
• Weather forecasters are not expecting temperatures any extreme cold in those regions.
• So, while the risk is there, its activation is unlikely this week.
• The forecasts do include some snow.
• But, again, likely not enough to extinguish the risk from killing cold.

Extreme cold is also the only active crop risk or United States’ winter crops.

• Poorly-established wheat crops in the north-west and the central and southern plains are vulnerable to cold.
• Obligingly, weather forecasters expect no widespread cold extremes in either region this week.
• Some snow has accumulated in the north-west.
• Forecasters expect more to follow this week.
• Whether that snow persists though is an open question.
• The central and southern plains have little or no snow cover now.
• And that is not likely to change much this week.