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What weather problem?

Growers elsewhere in the world are enjoying good conditions so far.

Bryce Knorr, Contributing market analyst

May 15, 2019

2 Min Read
field of young corn
Tanya145/iStock/Getty Images Plus

U.S. farmers suffered myriad weather problems this spring that caused slow planting and germination. But growers in other key regions fared much better. That could limit U.S. export potential in the year ahead because overall consumption isn’t growing rapidly enough to absorb good production around the world.

Here’s a look at the mid-May Vegetation Health Index maps for this year, compared to 2018. Improvement is visible, one reason USDA’s forecast of global production put out last week is higher.

Safrinha corn looks good

Brazil is a big competitor in the soybean market. But the South American agricultural powerhouse is also a rising player in corn. Much of the production is planted behind soybeans and is known as the safrinha crop.

Dry conditions a year ago slashed production, which opened a door for late season exports during the summer when Brazil’s doubled-crop corn is harvested. Conditions so far are much better this year. USDA’s says the total crop is more than 20% bigger, grain that could compete with leftover U.S. supplies.

It’s not just soybeans in China

U.S. wheat growers hope to sell more wheat to China if a trade deal is worked out, something that at best may not take place until combines are rolling on the Plains. China doesn’t normally import a lot of wheat, but millers there like the high-quality varieties produced here. China grows more wheat than Russia and Ukraine combined – its supplies are so big that traders regularly factor them out of world inventories when assessing market fundamentals. The crop in the south is generally irrigated; it’s in better shape than a year ago, with other areas also gaining. USDA forecasts the Chinese crop at 4.85 billion bushels, a little higher than 2018.

No trouble yet

Russia has become the world’s leading exporter but can suffer from terrible weather too. Drier conditions las year in Russia and its neighbor Ukraine raised hopes U.S. exports would improve during the marketing year that ends May 31. Sales picked up only slightly after the Black Sea duo found plenty to sell to big importers like Egypt. Winter wheat conditions in both countries are favorable so far, one reason the wheat market is under pressure this spring. USDA says production will be up 11% this year.

Drought fears fade

Much of the European continent suffered from hot, dry conditions last summer, with producers of high protein wheat like Germany hurt. That helped open up markets for U.S. growers, but a repeat doesn’t look likely. Spring rains have wheat in good shape from France to Poland, with Eastern European countries also faring better. USDA says European production will be up 12% this year as a result.

 

About the Author(s)

Bryce Knorr

Contributing market analyst, Farm Futures

Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and Commodity Trading Advisor. A journalist with more than 45 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.

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