Dry weather in Argentina, Spain and the United States worsens the outlook for the harvest

Grain market participants are paying more and more attention to the weather in the Northern Hemisphere, where the sowing of spring crops has begun. In general, conditions are conducive to work, but the Great Plains in the United States, southern Spain and Italy are experiencing a moisture deficit.

In Argentina, there was little rain that did not affect the condition of the crops, so the exchange in Rosario again lowered the forecasts for the soybean and corn harvest, while in Brazil, the weather favors the development of the second crop crops.

In the US Midwest, above-normal temperatures and moderate rains are helping field work, but precipitation next week will halt the planting of corn and spring wheat, which are already slower than last year. The Central and Southern Plains of the United States will experience rain over the weekend, which will be somewhat heavier in the north. However, moisture deficits continue to hurt winter wheat crops in Kansas, Texas and Oklahoma, so the market is awaiting a new USDA crop status report.

Rains will pass in the next few days in Brazil, which will improve the soil moisture in the second-harvest corn crops. The dry season will begin in May, but for now the moisture reserves are sufficient for a good harvest.

In Argentina, precipitation has passed in the main agrarian regions, but the condition of crops remains poor, and soil moisture reserves are insufficient for sowing winter wheat. Experts of the Rosario Grain Exchange reduced the forecast of corn production in Argentina in 2022/23 MR by 3 million tons to the lowest level of the last 14 years - 32 million tons, while last year it reached 51.1 million tons. The forecast of the soybean harvest was reduced by 4 million tons to 15-year low of 23 million t (42.2 million t in FY 2021/22) due to reduced production in the provinces of Santa Fe, Córdoba and Buenos Aires.

In Europe this week there were also rains, especially strong in Italy, but dry weather persists in Spain. Next week, precipitation will pass in the south of the EU, and in general, in most regions, the weather favors the development of the harvest.

The Spanish Farmers' Association reports that 60% of the country's countryside is currently suffering from drought. More than 3.5 million hectares of wheat crops may be lost in four regions. Barley crops were completely lost in four regions and badly damaged in another three. The lack of moisture for irrigation of sunflower and corn can lead to a reduction in the crops of these crops.

There are periodic showers in the Black Sea region, which will reach Ukraine next week. In general, the conditions in the region are favorable, but too wet and cold weather in Ukraine shortens the optimal sowing time for spring crops, so farmers will need to sow grain and oilseed crops within a few weeks, due to which the area under barley and peas may be reduced in favor of soybeans and sunflowers.