February’s weather impacting global crop outlook, analyst says
We are now in the midst of February, with extreme cold temps the past two weeks across most of the midsection of the United States.
That is not only not good weather for humans (20°F. to 30°F. below normal), but also not good for wheat. It’s likely at least some damage was done, but it could have been a lot more had it been in March, or worse yet, April when the crop is more susceptible to freezing. As it was, though, that might be the most severe cold spell we've had in decades – and it certaintly didn't help the wheat. We also have continued dry weather in western Plains states (Colorado, Kansas, Oklahoma, Texas, Nebraska, North Dakota, South Dakota, Montana) with very little subsoil moisture left. Having virtually no snow cover in these areas isn’t good for wheat, either.
Weather forecasts continue to suggest Brazil will have better weather including above-normal precip and below-normal temps. Argentine weather is still forecasting below-normal precip and above-normal temps (drought), which will offset the improving Brazil weather.
Second-crop corn in Brazil will have a decent start with the cool/wet weather – just what corn will need in the tropical atmosphere in Brazil. But the critical time is at pollination, which when planted two to three weeks late, is during the dry and hot time of year. Weather attention is already starting to shift to the Northern Hemisphere – and especially the very dry western U.S.
Last week, CBOT wheat was -4c, KC -8c, Mnpls -10c, corn -11c, and soys -9c for the first down week in a long time. Winter wheat in the U.S. experienced extreme cold period lasting 1.5 weeks, with temps basically 20°F. to 30°F. below normal for the entire period. That is very extreme cold, and is likely to have caused some wheat damage. Certainly anything out of dormancy and exposed to those temps is dead; but it was mid-February, so it’s not likely a lot of wheat was out of dormancy. Even wheat in dormancy and exposed to these kinds of severe cold could also lose some stand. It’s unlikely that it helped the wheat; remember, wheat prices are so low and corn/soy so much improved wheat growers will want any excuse to tear it up and plant corn/soy. In spite of the cold, wheat prices dropped just like corn and soybeans last week.
USDA has its Feb. Ag Outlook meeting Thursday and Friday, and it usually does a pretty good job of focusing on the issues likely to affect us in the next year. It’s not perfect, but at least it’s been a fairly reliable indicator of the coming year – given normal weather. Of course, we almost never have normal weather! But it will get some attention, especially with 120 mb soy carryout and 1.5 billion corn (and dropping). Chinese demand is perhaps the most important factor – although USDA has a history of ignoring trade deals with China (like last year). Now it seems China actually might honor the last one. Maybe USDA needs to change its tune?
Ray can be reached at email@example.com.
Ray is President of Progressive Ag Marketing, Inc., a top-ranked marketing firm in the country. See http://www.progressiveag.com for rankings and link to data from Top Producer Magazine and Agweb.com.
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