Snodgrass: What’s Going on With South American and U.S. Weather That’s Getting the Markets Attention?

Grain markets have been rallying this week on weather and crop concerns and it’s not just wheat. Eric Snodgrass, Senior Science Fellow, Nutrien Ag Solutions, talks about Northern and Southern Hemisphere weather.

South America is seeing some big weather extremes. Areas of Argentina and southern Brazil have had severe weather, torrential rains and some flooding that has slowed the soybean harvest and threatens the quality of the crop. Farmers in southern Brazil have nearly a quarter of the beans yet to harvest.

Eric Snodgrass, Senior Science Fellow, Nutrien Ag Solutions, “Yeah the flooding is pretty isolated but it’s isolated across some key acres and that’s down in a place called Rio Grande do Sol, so the Rio Grande of the south. :31 And it’s the southernmost state of Brazil and if we look back at over the last two weeks looking at satellite data that estimates total rainfall, we’ve got some numbers down there that push 500 millimeters so that’s nearly 20 inches of rain hitting some key acres.”

That area grows 15 percent of Brazil’s soybeans and losses are estimated at around 3 million metric tons or around 14%. That area also grows 20-percent of Brazil’s first season corn crop. However, in stark contrast Snodgrass says north of that area the rain has shut off for the second crop corn in parts of Brazil.

“You get just north of it and what’s north of RGDS, its Santa Catarina and Parana and that is where all of the safrinha crop is grown and it’s been bone dry there lately and we’re not expecting it to come back on a lot of that safrinha crop. So, yes you have this split between north very dry and south extremely wet so you’re either in flood or you’re in drought right now if you’re in those pockets of South America that grow a lot of the crops we talk about.”

He says those areas are expected to see continued dry conditions as the Monsoon season shut down about two to two and a half weeks early.

“And already just in the last two weeks we’ve picked up areas that haven’t receiving any additional late season rains which have been critical for the safrinha crop so will we see a response in yield and production? Possibly but it wouldn’t be something that I think would hit major news until harvest happens in June until then we could see the influence of this dry weather and it’s not just dry temperatures are running 5 to 8 degrees Celsius about average which means it’s quite warm for autumn weather down there,” he says.

In Argentina farmers have also seen leafhopper damage in corn. As a result, the Buenos Aires Grain Exchange lowered the crop by 3 million tons to 46.5 million.

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