Forecasts of precipitation in Argentina and warm weather in the US and Europe will reduce speculative pressure from weather factors on prices

Traders are currently focused on the weather in Argentina, where a drought in January reduced the potential yield of soybeans and corn. But last week's rainfall improved the condition of the crops, while weather conditions in Brazil remain very favorable.

In Argentina, a front brought heavy rain to some of the driest areas on Wednesday, and a new front moving north on Friday brought additional rain. Several waves of rain are expected this week, which could improve the crop. According to the Buenos Aires Grain Exchange (Bolsa de Cereales), as of February 6, sunflowers had been harvested on 27.9% of the planned area, with an average yield of 2.28 t/ha (+0.1 t/ha compared to last year), raising the harvest forecast by 400,000 t to 6.2 million t (vs. 5.5 million t last season) due to an increase in area to a 10-year high of 2.7 million t.

Heavy rains are falling across Brazil , helping to develop late soybean crops and sow a second crop of corn. Soybeans have already been harvested on 14-16% of the area, and in the main state of Mato Grosso, 35% of the area, allowing for optimal corn planting. Intermittent rains are expected this week, which will delay soybean harvest but improve soil moisture.

After another wave of frost in the Midwest and Plains, the U.S. is expected to see a sharp rise in above-normal temperatures and a few strong storms bringing rain this week. There are many dry and arid areas in the Central and Southern Plains, so rainfall in the coming weeks will be important to improve soil moisture before spring wheat planting.

Europe is experiencing frost-free weather with frequent rainfall, which is helping winter crops overwinter and accumulate moisture. For the first time in many years, such favorable weather is spreading south, all the way to northern Africa.

Very severe frosts covered Ukraine last week and will continue on Monday and Tuesday, which may negatively affect winter crops with little snow cover. But starting Thursday, temperatures will rise to positive values during the day, which will lead to slow snow melting and moisture accumulation in the soil.

In Australia, despite recent isolated rains, dry conditions prevail for cotton and sorghum. Scattered rain is forecast for New South Wales over the weekend, and there is a possibility of further rain in the east next week from Tropical Cyclone 20S. However, the dry weather has been prolonged and a lot of moisture is needed to improve the situation. Planting conditions for cotton and sorghum generally remain poor.