Source: Commodity Weather Group, LLC
The Commodity Weather Group, LLC (CWG) released its latest 2010-11 outlook for its agricultural clients this week, looking ahead to South American production prospects. Although 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 more than 35 percent from normal. "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."