AGRICULTURE WEATHER WATCH: Impact likely on global output prospects amid El Nino forecast

The potential El Nino development in June 2023, after three straight years of La Nina, may impact global agricultural output prospects.

According to the Australian Bureau of Meteorology, there are around 50% chancesof an El Nino developing in 2023.

“This is about twice the normal likelihood. Warming is continuing in the central and eastern tropical Pacific,” the agency said in an update May 9, maintaining its El Nino Watch.

In an El Nino event, in east Africa and east Asian countries there is a tendency for wetter conditions. Conversely, drier conditions are generally observed in west Africa, southern Africa, India, south-east Asia, Australia, northern areas of South America and Central America.

Australia
** Showers expected to be below normal over the next two weeks across Australia, the BOM said.

** Most of the country is likely to see sharply higher temperatures over the next two weeks, the BOM said.

** Below-average rainfall and above-average temperature are likely to diminish soil moisture.

** Trade estimates for Australia’s marketing year 2023-24 (October-September) wheat harvest are around 25 million mt-30 million mt, against a record 39.2 million mt harvest in MY 2022-23, which is expected to weigh on exports.

** Platts assessed FOB Australian Premium White wheat at $296/mt May 10, down 3.9% from two weeks ago, S&P Global Commodity Insights data showed.

Malaysia & Indonesia

** The possibility of El Nino has made palm oil markets wary of a supply shortage, with one senior analyst pointing to weather problems in Malaysia and Indonesia by 2023-end and in 2024.

** “Climate change has made weather treacherous,” Dorab Mistry, director at Godrej International Ltd said. Mistry added prices may rise amid El Nino, saying that palm oil futures could rise above MR 4,000/mt ($897.61/mt) in the second half of the year.

** In palm oil production, stress from prolonged periods of drought during an El Nino year affects yields, labor productivity, and raises the risks of fires in plantations. The two countries account for about 85% of the world’s palm oil production.
** Platts assessed crude palm oil at $944/mt FOB Indonesia May 10, down 2.1% from two weeks ago.

EU

** Most parts of Europe, especially France and Germany, are expected to witness above-normal showers over the next two weeks, according to the European Centre for Medium-Range Weather Forecasts on May 10.

** Temperatures are likely to remain near normal during the next two weeks, the center said.

** Above-normal rainfall, coupled with normal temperatures, are likely to boost soil moisture and help ongoing corn plantings and standing wheat crops.

** The European commission has forecast in its April update that EU cereal production in MY 2023-24 (July-June) would be 287.1 million mt, against 267.9 million mt in the previous year.

** Platts assessed EU wheat with 11% protein content CPT Rouen at $257/mt May 10, down 8.1% from two weeks ago, S&P Global data showed.

US

** Seasonably dry weather prevailed during April in much of the Southwest, while occasional showers stretched from the Northwest to the northern Rockies, USDA’s latest weekly Weather and Crop Bulletin said May 9.

** Although late-April rainfall provided some limited drought relief across the central and southern Plains, the US Drought Monitor indicated by May 2 that extreme to exceptional drought covered 63% of Kansas, along with 47% of Nebraska, 33% of Oklahoma, and 21% of Texas.

** By May 7, producers had planted 49% of the nation’s corn crop, 28% points ahead of MY 2021-22 (June-May), USDA said.

** Around 35% of the nation’s soybean acreage was planted by May 7, 24% points ahead of previous year.

** By May 7, 38% of the nation’s winter wheat crop was headed, 6% points ahead of previous year.

** Platts assessed FOB US corn CIF New Orleans at $275/mt May 10, down 1.1% from two weeks ago.

Argentina

** Showers provided timely moisture for winter grain germination in many major production areas. Rainfall totaled 10-50 mm, while locally approaching 100 mm over a large area centered over northeastern Argentina, extending as far south and west as Cordoba and northern Buenos Aires.

** Weekly average temperatures were largely near normal. Nighttime lows fell below freezing in traditionally cooler southern locations but given the lateness of the season, no impact on immature summer crops was likely.

** According to the government of Argentina, corn was 28 % harvested as of May 4 against 38% the MY 2021-22 (December-November), while soybeans were 46 percent harvested against 62% a year prior.

** Platts assessed Argentina corn FOB at $241.73/mt May 10, up 2.2% from two weeks ago.

Brazil

** Heavy showers brought much-needed relief from dryness to Brazil’s southern-most farming areas.

** According to the government of Rio Grande do Sul, soybeans and corn were 80% and 84% harvested, respectively, with most of the remaining crops maturing and not likely to benefit from the rain.

** In Paraná, soybeans and first crop corn were 99% and 90% harvested, respectively, as of May 1. Around 37% of the fully planted second corn crop had reached flowering.

** Platts assessed Brazil corn FOB Santos at $231.88/mt May 10, down 3.6% from two weeks ago.

Tags: markets, Australia, Production, cereal, corn, Malaysia, prospects, Indonesia, La Nina, premium white wheat, Brazil, palm oil, EU, futures, France, Germany, weather, soil moisture, winter wheat, output, soybean, Argentina, Europe, Эль-Ниньо, US