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More weather crop woes for China

The past two summers have been excessively wet for China; 2021 looks to make a switch.

By Bill Kirk

China may be No. 1 in producing rice, wheat, potatoes, watermelons, tomatoes, onions, apples, pears, grapes, peanuts, tea, tobacco, and many other crops, but it takes a back seat when it comes to corn, trailing U.S. production by a whopping 42%.  

Unlike the United States, where only 316,000 farmers grow corn, over 2 million do so in China with the limited 10% of land that is arable. Of that land, there are three major corn producing areas: northeast China, east China, and south-central China, where an earlier season corn is grown. The northeast region is the main production area, and it is similar in latitude to the Dakotas and Wisconsin. Most corn is planted in April and May (as in the United States) and harvested in September and October. 

Enough on the geography lesson; now to the weather report.

The record China corn crop year was 2015, when the weather was the coolest in 13 years with average precipitation, an ideal scenario. Since then, it has been too wet or too hot in all the wrong places and, in part, explains the 63-mmt swing from a surplus of Chinese corn in 2014 to a deficit in 2020 and the lowest ending stocks in six years. 

The weather certainly did not help in 2019, the wettest in 21 years across China, followed by near-record-hot conditions in 2020. Spring 2020 started off well for China’s farmers with the driest planting season in nine years, but then things went south with the heat and too much rain.  

Now 2021 looks to make another big change toward much drier conditions for the season overall, which will help – and hurt – production with out-of-sync weather. The out-of-sync conditions will start with a much colder spring across China; the coldest conditions in eight years and wettest in five years are very likely to delay planting. This news, combined with the challenging conditions across South America (drought) and dry planting conditions in the United States, will likely be the start of a commodity rally in spring into June as we saw in 2016, when Brazil had a bad crop year.  

This year’s core summer months across China look to be much drier, trending toward the driest in 11 years. There may be enough soil moisture during planting to carry some crops through the season, but certainly a fair amount of risk will likely have traders looking at weather maps. China’s farmers are less likely to have the yield-producing hybrids that American farmers have.

While on the topic of China, it is important to look to Ukraine’s weather outlook, as that nation sends most of its grains to China. Unlike the United States and China, Ukraine’s crops are grown much farther north at a latitude of 48° (think southern Canada as a comparison). Ukraine had its share of weather issues in 2020, with cold planting conditions in May and early June and the overall season trending the coldest in 11 years. Dryness was an issue during the summer, resulting in a 9% drop in overall grain production.

Spring planting looks to be more favorable for Ukraine farmers, with the warmest and driest conditions in three years, but a wetter late winter will keep soil moisture levels decent during planting. The dry weather will likely continue into early summer before a wetter pattern takes shape in August and September.



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