Forecasts of hot and dry weather will affect agricultural markets next week
This week's weather in major grain exporters has helped with crop development and harvest, but forecasts of hot and dry weather next week could lead to speculative gains in soybean and corn prices.
In the main soybean and corn growing regions of the Midwest and the Central and Southern Plains of the United States this week, the front brought showers that replenished moisture reserves. Already from the weekend, the heat will prevail there at 32-34 o C without precipitation, which will last for about a week. Rains will pass at the end of next week, which will reduce the heat, but above-normal temperatures will persist until the end of August.
According to the USDA, the number of corn in good or excellent condition for the week rose 2% to 59% (57% last year) and soybeans rose 5% to 59% (58% last year). Winter wheat was harvested on 92% of the area, and spring wheat on 24%.
Rainy weather will dominate the US Northern Plains during the week, which will improve the outlook for soybean and corn crops.
Rains are falling in southern Brazil, improving the condition of wheat crops, but delaying the harvesting of second-crop corn. Next week, the rains will increase and replenish moisture reserves ahead of soybean planting, which will begin in mid-September.
In Argentina, corn has been harvested on 90% of the area, but winter wheat crops in the main agricultural region of the country remain in poor condition due to a lack of precipitation, which is also not forecast for next week.
In Europe during the week, hot weather without precipitation is expected, with the exception of the northern regions, which will facilitate the harvesting of early crops and the development of soybean, sunflower and corn crops. Heavy rains last week significantly replenished soil moisture reserves.
In Ukraine, hot weather without precipitation will last for another week, which will allow to complete the harvesting of early cereals and the sowing of winter rapeseed. Temperatures of 30 o C and 15-17 o C at night will not harm soybean, corn and sunflower crops, especially if the small rains promised by meteorologists at the end of next week pass.
In the Black Sea region of the Russian Federation, dry and hot weather will negatively affect the filling of corn and sunflower, especially in areas with insufficient soil moisture. Drought in Altai will reduce the spring wheat harvest potential. Currently, 61.2 million tons of wheat with a yield of 4 tons/ha are collected in the Russian Federation from 15.2 million hectares or 51.4% of the area (67.8 million tons and 4.4 tons/ha last year, respectively).
