Seasonal Temps Return to the Midwest
Starting out this morning, it seems grains are beginning to lose any momentum they may have had last week.
First of all, despite the situation in Ukraine and Russia, export demand remained strong in the Black Sea Region. In fact, last week 95,000 tons of corn and 200,000 tons of wheat were shipped. Thus, a combination of profit-taking and equity market relief is proving bearish for grains.
Looking at weather-related factors, heavy rainfall across portions of Texas, Oklahoma, and Arkansas delivered widespread 1-inch rainfall amounts, with some of this falling across the eastern wheat regions of Oklahoma. However, farther north and west, the key productivity regions were spared any beneficial rainfall totals. Farther north, much of the Midwest was dry, although 1 to 3 inches of snow fell across southern Iowa into northern Missouri and northwest Illinois, with little elsewhere.
Looking at the pattern the next five days, seasonable temperatures are in store for most of the corn and wheat regions along with near- to below-normal precipitation. Several small, inconsequential systems will pass through the Midwest through this weekend, with total accumulated precipitation over the next five days forecast to be .10 inch or less from western Illinois into southern Iowa south and west through much of the Southern Plains. Heaviest rainfall totals the next five days will occur across the southern and eastern U.S., with upwards of 2 inches forecast to fall across north-central Florida.
Looking to the six- to 10-day time frame, our transition into astronomical spring will feel more like a transition back to winter as below-normal temperatures return to much of the northern U.S., with much-below-normal temperatures (8 or more degrees below normal), forecast across the Upper Midwest northward into much of Canada.
This will favor above-normal heating demand for cities like Chicago, Des Moines, Minneapolis, New York City, and Boston, with increased drawdown of natural gas supplies. Above-normal temperatures during the six- to 10-day will be found across the southwestern U.S. As the trend has been this winter, this cold pattern will be accompanied by more dry weather across the western Midwest and Southern Plains as moisture return from the Gulf of Mexico will be suppressed.
This pattern will persist into at least the start of the 11- to 15-day time frame, with a moderation trend towards the end of the period. Interestingly, our teleconnections remain in a general warm phase (+AO, +NAO, phase 1/8 MJO), which offers little clue as to the forcing behind yet another blast of Canadian air. Tying this all back to the grain markets, dry weather for the HRW Wheat belts may prove modestly bullish, although it will likely be overshadowed by market reactions to the political environment in Russia and the Ukraine.
Weather-market implications look neutral for South America over the next several days with SA export pace/declining palm oil futures more likely to affect the market than any weather-related factors.