Group releases South American production prospects

by World Grain Staff
Share This:

BETHESDA, MARYLAND, U.S. — The Commodity Weather Group (CWG), LLC released on Aug. 23 its latest 2010-11 outlook for its agricultural clients this morning, looking ahead to South American production prospects.

While impacts differ between Brazil and Argentina, the driving force behind the upcoming growing season will be a strong La Nina, resulting from very cool Pacific Ocean waters. The current forecast favors near trend yields for winter wheat in Argentina, but below trend for corn and soybeans. In Brazil, the current outlook would support above trend yields for corn, soybeans, coffee and sugarcane at the moment.

"Spring dryness in southern Brazil and northern Argentina may cause some building moisture deficits during corn and soybean planting, but rains are expected to arrive much more broadly as moisture needs build for southern Brazil late this year," says CWG Vice-President and Meteorologist Joel Widenor. "Argentina will remain the area at greater risk for corn and soybean losses, due to summer heat and dryness."

In addition, CWG continues to focus on two key wheat areas, Russia and Australia.

Russia has suffered from one of the worst droughts in history this summer, cutting grain production levels by over 35% from normal. CWG's commodity weather team was the earliest weather group to identify the magnitude of the dryness and its impact on crop production potential. The concern now has shifted to winter wheat planting for the 2011 season.

"Analogs show that rains tend to remain below average this fall, which will hamper crop establishment and make it more susceptible to winterkill losses," said CWG Chief Operating Officer and Meteorologist David Streit. "Some acreage may not get planted, and this could lead to the need to switch to spring wheat which has only half the yield potential of winter wheat."

Australian wheat normally fares much better than average in a La Nina pattern. It does appear that much of the crop area will see enhanced rainfall potential and above trend yields. However, a drought in western areas will be harder to eradicate, as key development occurs over the next two months. This will lower yield potential for about 25% of the country's crop. As a result, production will only be slightly above trend.

Partners