10 April 2018
Challenging weather, primarily across the Americas, is the main concern for global cereal crops as highlighted in the recent Market Monitor report by AMIS.
Dry weather affecting both Argentina and key winter wheat states in the US is affecting their maize and wheat crops respectively. However, favourable winter weather in the EU, India, Russia and parts of the US looks set to help planted wheat. Whilst similarly, in Brazil favourable weather is helping their maize crop.
US wheat prices rose last week on the back of continued severe weather in the country. Snow coverage in the key spring wheat growing states of North/South Dakota, Montana and Minnesota, caused worries over the ability to plant spring wheat. Low temperatures are forecast to remain through April meaning that unfavourable conditions are likely to persist. In Europe wheat futures also rose last week (Thursday – Friday) predominantly reacting to US weather concerns.
In the latest Food and Agricultural Organisation (FAO) forecast total cereal production for the 2017/18 season was increased by 3.5Mt from the March forecast. Increased maize production reported from the EU was the main addition this month. However, early projections for the 2018/19 season indicate that both coarse grains and wheat production is expected to be lower, largely due to dry weather in the US and South America but also reduced planting in the EU.
According to the Met Office March rainfall was 10% above average (1981-2010) in the UK, making it difficult to get spring planting underway.
In a week dominated by the possibility of retaliatory tariffs between the US and China, soyabeans futures have undergone a decline (Thursday 29 – Friday 6). However, weather impacts in Argentina have continued to be a factor. The Argentinian soyabean crop continues to be of concern with the possibility that output could fall below 37Mt, leaving Argentina facing the prospect of becoming a net importer for 2018/19 (Mar-Feb, www.oilworld.biz).