Precipitation in the US and drought in Argentina will affect grain markets next week

Long-awaited and heavy precipitation in Argentina and southern Brazil improved the condition of soybean and corn crops, which led to a slight decline in prices. However, meteorologists do not predict rain for the next two weeks, which increases traders ' concerns and raises quotes.

In the United States, there is still a lack of precipitation in the regions where winter wheat is grown, which worsens the condition of crops. However, weak crops, almost not covered with a layer of snow, are not damaged, since there have not yet been severe frosts.

Next week, a cold wave from Canada will come to the Southern Plains of the United States and the Northwest, which will bring light and uneven precipitation. A cold front with snow and light frosts will also come to the Midwest of the United States next week, but in general, the moisture supply of the "Corn" Belt is much better than in the western regions.

In the south of Brazil, heavy rains took place, which replenished moisture reserves on late crops of soybeans and corn, which is important on the eve of sowing Corn of the second crop. Due to a prolonged drought, the Local Agency Deral lowered its forecast for soybean production in the state of Parana (the second largest producing state in Brazil) in 2021/22 MG to 12.8 million tons, which is 35% lower than the 2020/21 mg harvest, 44% lower than the December forecast and 60% lower than the October forecast. At the same time, the forecast for corn production has been raised to 15.2 million tons, which is 165% higher than last year's harvest. In the North and center of Brazil, it periodically rains, which replenish moisture reserves, but delay the harvesting of soybeans and the sowing of corn of the second crop. Due to the drought in the southern regions, the forecast for soybean production in Brazil remains at the level of 135-136 million tons, which will be lower than last year's harvest, even despite the increase in sowing areas.

In Argentina, heavy rains that lasted for several weeks improved the condition of early soybean and corn crops, and created good conditions for late sowing. No new precipitation is expected within 7-10 days, and temperatures will not be high, which will accelerate plant development. Forecasts of a resumption of drought in the country remain the main factor in the speculative growth of exchange prices for soybeans and corn.

In Europe, Ukraine and Russia, the weather contributes to the wintering of winter crops. Heavy precipitation and above-normal temperatures will accelerate plant development in early spring.