Favorable weather in the US, Europe and Ukraine increases pressure on agricultural quotes

Traders' main focus is now on the weather in North and South America, where improving conditions are helping to accelerate the harvest and planting season and gradually reducing the speculative impact of weather risks on prices.

 

Last week, heavy rains hit the US corn belt, temporarily delaying the harvest of late crops but also significantly replenishing moisture reserves for winter planting.

The front is gradually leaving the Midwest, where Iowa, northern Illinois and northern Missouri received the most rainfall. The showers also helped to ease some of the long-standing drought in parts of the Plains.

 

Dry and warm weather is expected in the Midwest and Plains over the next 10-14 days, which will allow for a sharp acceleration of soybean and corn harvests and reduce the risk of crop losses. Against this backdrop, analysts are already raising their forecasts for U.S. soybean and corn production.

Last week, dry and warm weather also prevailed in the Canadian prairies, which accelerated the harvest and reduced the speculative premium in canola quotes.

 

As of September 29, canola had been harvested on 57% of the area in Manitoba, 45% in Saskatchewan, and 31% in Alberta.

This week is expected to be mostly dry, although precipitation and sub-zero temperatures are expected later in the week. By then, farmers may have time to harvest up to 80-90% of their crop.

 

In Brazil, heavy rainfall continues to advance from the south through the central regions, effectively marking the timely start of the rainy season.

Rainfall will continue this week, contributing to moisture accumulation and high rates of first-crop soybean and corn planting. Analysts are already raising soybean and corn production forecasts in Brazil due to the early start of the planting season and sufficient rainfall.

 

Argentina has also seen an increase in rainfall, helping to fill winter wheat and accelerate corn planting. Cold weather is currently holding back active field work, but forecasts are calling for warmer temperatures and additional rainfall next week.

 

In Western Europe, increased precipitation is helping to accelerate the sowing of winter crops, especially in arid regions of France and Germany.

Dryer weather is expected in eastern Europe next week, which will allow for faster completion of late crop harvesting and winter sowing.

 

Dry and warm weather set in in Ukraine last week, which is helping to accelerate the harvesting of soybeans, sunflowers, and corn, as well as the sowing of winter wheat.

With rain expected later this week, farmers will try to speed up the soybean and sunflower harvest. At the same time, due to falling corn prices, some producers are ready to postpone harvesting until spring.

 

Southeast Australia experienced moderate rains last week, which partially improved the condition of wheat and rapeseed crops in moisture-deficit regions.

However, forecasts for the next few weeks predict light rainfall, so risks to crops in the east of the country remain. In western Australia, satellite data indicate generally good crop conditions.

 

In central and northeastern China, intermittent rainfall may cause isolated delays in harvest.

Meanwhile, winter wheat and rapeseed growing areas in the south-central part of the country need additional moisture for sowing and rooting. Recent and forecasted precipitation should improve conditions for the development of these crops.

 

Overall, weather conditions in the US, Canada, Europe and Ukraine are helping to accelerate harvest, while timely rainfall in Brazil and Argentina is improving prospects for the new season. This is reducing the weather premium in agricultural markets and could increase pressure on grain and oilseed quotations in the coming weeks.