MarketsFarm — Canadian producers looking for challenging growing conditions elsewhere in the world to prop up commodity prices may be disappointed during the 2020 growing season.
“If you’re looking for any help from South America for your canola or soybeans or corn, you’d better look somewhere else,” Drew Lerner, president of World Weather Inc., said during his presentation at Ag Days at Brandon, Man.
Despite significant hand-wringing due to drought concerns in Brazil, the country is expected to produce a record-breaking 124 million tonnes of soybeans.
“There’s no reason to expect anything but big crops from this region,” said Lerner.
Soybean planting in Brazil occurred later than expected, but the country’s rainy season is long enough that it wasn’t an issue.
“Late planting won’t have an impact going forward,” he said, noting the soybean harvest begins later in January and goes into February.
“It’s too late for the soybean crop to be screwed up in a big way.”
Argentina’s growing season hasn’t been quite as favourable as Brazil’s, with lingering dryness in the north. However, the country is still on track to produce 23 million tonnes of soybeans.
“Their crop doesn’t influence world prices as much as Brazil’s, unless Brazil has a real problem already,” Lerner said.
“Argentina isn’t going to lose enough to move markets in a significant manner.”
While Australia is contending with its third year of record-setting dryness in some areas — and about 24 million acres of bushfires — its growing conditions are likely to improve.
“The reason for the drought being so serious is going away,” Lerner said.
Warmer-than-normal Indian Ocean temperatures and lingering El Niño conditions were driving factors behind the severity of the drought.
“There is going to be more moisture in key canola-, barley- and wheat-growing regions when planting season comes along,” he said.
“They have a much better potential for having a better year this year. The situation is not going to get a lot worse.”
Similarly, China contended with drought concerns from autumn into December. Recent rains have winter wheat crops “in a position to improve greatly” in the eastern part of the country, though the northern region remains dry.
“Some additional moisture is needed in the north, but the situation is much better now than it was in early December,” Lerner said.
Key growing regions in the United States are expected to experience a cold, wet spring. Colder temperatures in the upper Midwest and northern Plains will “clash” with warmer tendencies in the Gulf of Mexico.
“There’s going to be a lot of rain,” said Lerner.
However, the growing season is expected to be a bit more co-operative, with warmer and drier tendencies.
“The spring might be wetter and delayed, and there might be some worry,” he said.
“But the bottom line is they’re going to have good crops.”
— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.