Increasing drought in Ukraine and southwestern Russia, as well as a heat wave in the US, will affect markets in the coming weeks

Traders continue to closely monitor the weather conditions in the Black Sea countries, where increasing drought significantly reduces the yield potential of late crops and may make it difficult to plant winter rapeseed and wheat at optimal times.

A sharp rise in temperatures to 34-35 degrees is forecast for next week in the US Corn Belt, which could add stress to soybeans and corn, especially in regions with insufficient rainfall.

In Ukraine and the south-west of Russia, the drought continues to worsen, and the temperature this week has risen to 30-35 degrees without significant precipitation. Only by the end of the week the temperature has decreased slightly, but it remains high in the eastern part of the region.

Another wave of hot and dry weather is forecast to return next week, with high temperatures and no significant rainfall, which will continue to affect crop potential in the region. Sowing of winter rape, which should take place from August 5 to 25, remains at risk, as the lack of moisture in the soil can lead to the loss of crops.

In the western regions of Ukraine, conditions for the ripening of corn, soybeans and sunflowers are more favorable due to frequent rains coming from Western Europe. A recent cyclone brought showers to western regions before spreading east and south, reducing plant stress in southern Europe. However, the next week is forecast to reduce the amount of precipitation and increase the temperature to 28-30 degrees, which may reduce the potential of the sunflower and corn harvest, especially in Romania, Bulgaria and Hungary.

In the U.S. Midwest, as well as the Central and Southern Plains, conditions remain favorable for corn and soybeans. Temperatures in the 30s and 35s next week could reduce crop potential, despite possible thunderstorms in some states.

Cooler weather with little precipitation is expected across the U.S. Northern Plains, which could delay spring wheat harvest and over-wet corn and soybean fields.

Conditions remain favorable across the Canadian Prairies, but additional precipitation could delay spring wheat and pea harvests, although they will benefit corn, soybeans and canola crops.

In Argentina, the cyclone moves from south to north, bringing precipitation and cold air with frost, which adversely affects winter wheat. Heavy rains are needed to support wheat development and prepare the soil for corn planting that will begin in September.

In Southern Brazil, the cyclone will bring rains to the states of Rio Grande do Sul and possibly Paraná, which will be favorable for wheat crops. However, the central part of Brazil continues to have hot weather with temperatures of 34-35 degrees, and no rain is forecast yet, which could delay the start of soybean planting on September 1.

In Australia, favorable conditions for winter crops persist across much of the country, with showers expected in the west and south next week.