There is nothing like seasonal changes to stir up the atmosphere. Weather over the past few months has certainly been stable, but in this case that should not be interpreted as “normal.” Drought in Canada, the southern U.S. Plains, northern Europe, southwestern Russia, eastern Ukraine and eastern Australia continued week after week over the past three months. The impact of drought in each of these areas has been negative on agriculture with production cuts in many areas.
Predictions for significant weather change never seemed to materialize, however, and if it had not been for the favorable weather in the United States, China and much of India there might have been a little more market frenzy in commodity futures trade. Instead, the life blood in the trading industry continues to be squeezed out and many traders have thrown in the towel on the futures market because of an outlook favoring good summer production in Brazil and Argentina during the next several months.
Much hope was put on seasonal weather pattern changes in September and October to provide the necessary cure-all for the many areas of ailing weather and crop development. Already, nature has brought an end to the growing season in Canada’s Prairies with frost and freeze conditions in the first week of September. This may not have been unprecedented, but it still added more loss to canola, corn, flax and soybean production.
Long season crops like corn and soybeans are being grown more frequently in the Canadian Prairies even though long-term climate trends suggest that is not a very wise thing to do. Warmer and longer-than-usual growing seasons in recent years in the Prairies has stimulated farmers into planting coarse grain and oilseeds in an attempt to take advantage of better money for their crops. However, nature brought on the earliest frost and freeze event in Saskatchewan since 2008.
Drought did have crops in the Canadian Prairies more advanced than usual this year, but they needed a few more weeks to finish out most favorably. The impact of the cold was not significant on overall production, but the cold also brought in more dry air, and for a region in its second year of drought that was the last thing desired.
In Canada, the Prairies have a narrow period in which to get summer crops harvested and soil moisture replenished after prolonged drought before the winter freeze up takes place. If it starts raining too early the harvest will be delayed; if precipitation comes too late the ground will be frozen and unable to welcome a significant bolstering of soil moisture until spring 2019. If that happens, the odds are high that spring 2019 may get started in the dust, once again raising worry over yet another year of production.
A similar situation is now in the face of southwestern Russia producers. Their soil is also critically dry. A lack of rain in the past few weeks has hurt sugarbeet production and reduced the quality of late season soybeans and possibly some sunseed. September will be a critical month for getting moisture back into the soil in time to support autumn wheat and rye planting and establishment before temperatures get too cold.
Eastern and southern Ukraine also has been in a similar situation with drought, but showers recently evolved to offer some short-term relief.
Eastern Australia’s drought — some have called the worst of the century — has been eased slightly in recent weeks by brief periods of light rainfall. Most of the precipitation has not been enough to do more than moisten the topsoil, but every drop of rain is critical while wheat, barley and canola move into reproduction. More rain is needed, but not likely to occur in large enough quantities to end drought.
One surprising bright spot in weather for eastern Australia, Indonesia, Malaysia and parts of the Philippines has been a recent trend toward improving soil moisture after late July and much of August was drier than usual. Fear was moving through the marketplace and through the minds of many farmers in the region because of forecasts calling for El Niño in the fourth quarter of this calendar year. El Niño would create drought conditions for most of these production areas, and if rain had not brought in a little relief from recent drying the resulting drought that evolved after El Niño began would have be quite severe.
The greatest news of the month has been in the delay of developing El Niño conditions. World Weather, Inc. suggested the U.S. National Oceanic and Atmospheric Administration’s (NOAA) ENSO model was a little too aggressive with its prediction for El Niño development in September. The latest ocean data has verified that the odds of getting El Niño to evolve in the month of September are now quite low. Delaying the onset of El Niño for as little as one month opens the door of opportunity for Indonesia, Malaysia, the Philippines, Eastern Australia and southern India to get one more month of possible rainfall. The same is true for South Africa, Central America and southern Mexico, where dryness associated with El Niño might have had a negative impact on late season production.
In the meantime, changing seasonal weather is offering some important opportunities for drought relief in Europe, Russia, Ukraine, Australia and the southern U.S. Plains. Each of these areas already has reported some improving conditions in the past week or two and the trends are likely to continue as the Northern Hemisphere autumn begins and the Southern Hemisphere spring season gets underway.
Recent excessive rainfall in the U.S. Midwest certainly has grabbed the attention of traders and producers. Some wild weather forecasts in early September stating that the rainy weather would occur through all of September had many folks concerned, but changes are in the making that should help prevent that from verifying. However, if El Niño is not going to be a factor in the next few weeks a needed Great Plains and western Corn Belt dry down may not be so quick in coming. A wet harvest would be a big problem, and in this particular case the U.S. farmers should be rooting for El Niño so that it does dry down more favorably later this month and next for a good harvest season.
U.S. hard red winter wheat production areas benefited greatly from early September rainfall. The region has moistened up nicely to support early planting. Drier weather returning to the region will be good for supporting aggressive field progress.
A delay in the development of El Niño in Canada’s Prairies might also be welcome for a little while because of the need for a soaking rain. As long as El Niño stays out of the picture the potential for dryness easing rain will improve over the next few weeks. El Niño tends to dry out the autumn and winter, and if it evolves too soon the impact may not bode well for next spring.
In South America, weather conditions have been mostly near average recently. There is concern over dryness in Argentina, but that is not likely to be perpetuated through the spring planting season. When El Niño kicks in the nation will be more assured of timely rainfall during the growing season. In Brazil, most indications suggest a normal start to the rainy season after a bout of hot, dry weather occurs for a little while in September. El Niño also will prove favorable for Brazil as long as it evolves later in the fourth quarter as expected.