Milling & Baking News - December 17, 2019 - 30

Weather Update

Brazil soybean supply flood unlikely
to disturb market doldrums
BY DREW LERNER

Stepping back at the midway point in
Brazil's soybean production season it
is difficult to conclude anything less
than another banner year for the nation. Production is set to be tremendous, and the resulting flood of soybeans in the marketplace will not help
commodity trade that has been in the
doldrums for an extended period of
time. Argentine production is possibly headed for a little trouble, but as
seen in past years when Brazil has a
tremendous crop, it does not seem to
matter much what kind of production
year Argentina has unless there have
been other production issues elsewhere in the world.
Not too many weeks ago traders and
some producers were concerned about

normal withdrawal of seasonal rains.
The lack of late-season rain will stress
second-season corn during its reproductive and filling stages of development, possibly leading to lower yields.
The second-season corn crop this year
should account for nearly 70% of the
total Brazilian corn production.
Argentina has not enjoyed the same
fruits of routinely occurring rainfall this
year as Brazil. Many areas in the west
and south have struggled with dryness
at times since the growing season began. Planting of summer crops are behind the usual pace, and recent bouts of
hot weather have further stressed crops
that have emerged and established.
Peanut and late-season corn planting
are most behind in their usual progress,
and without greater rain soon, some of

Average
7-day topsoil
moisture ended
Dec. 9, 2019
what was claimed to be delayed seasonal rainfall. Steadily improving rainfall
and soil moisture have been reported
over the past few weeks and temperatures have become more seasonable.
The environment is ideal for accelerated plant growth and development.
The only negative comment that
may be made about Brazil's production potentials this summer is in regard to the potential for a shortfall in
second-season corn yields due to an anticipated shortage of moisture during
reproduction. That moisture shortage
would come because corn is planted
later than usual, and the odds do not
favor an extended rainy season beyond
April. Corn will reproduce while soil
moisture is in decline following the
30 / December 17, 2019

Milling & Baking News

these unplanted fields will slip even
further behind.
Argentina is not likely to move into
a full-blown drought this summer
- at least not on a large scale. Small
regional droughts are expected, and
(as of the time of this writing) most
of southern Argentina was facing an
erratic rainfall pattern through the
Christmas and New Year holidays.
Early-planted corn and sunseed have
been fighting dryness for an extended period of time in some areas, and
rain must begin falling more earnestly
soon to protect production potentials.
Sunseed likely will suffer lower production first and more significantly
over that of early corn, but both will
be stressed until more rain falls.

Not all of Argentina's crops are suffering from dryness. Many well-timed
rain events have occurred in recent
weeks to support crop development in
northern and some central crop areas.
This trend will continue over the next
few weeks. Some scattered showers
and thunderstorms are likely in many
areas, and there may be sufficient rainfall at just the right times to keep crops
viable while raising the potential for
lower yields.
Weather conditions in South America will continue erratic through the
next few weeks with Brazil getting sufficient rain to support good yields outside of the far northeast where dryness
will lead to lower production. Northeastern Brazil, however, does not produce enough soybeans to induce much
harm to the nation's bottom line for
production. Losses in northeastern Brazil when coupled with potential losses
in Argentina may still not be enough to
seriously alter the bottom-line production for South America, and that will
not bode well for bullish commodity
trade around the world.
South Africa has seen favorable
weather in the past few weeks improving its summer coarse grain and
oilseed crop development potential.
However, South Africa has a long way
to go before its summer crops are mature and harvested. Western peanut
and groundnut production areas will
experience a poor planting season once
again this year that could threaten production and some of the corn that got
planted late because of delayed seasonal rainfall. That suggests South Africa
will not have a perfect summer season,
but no disaster is expected either.
India's winter crop production region is poised for huge yields. Wheat,
rapeseed, millet, sorghum, groundnuts and even its sugarcane, citrus
and coffee crops all will perform better than usual this year because of the
record-setting late monsoonal rainfall.
Some timely rain already has occurred
in northern India for support of winter
crops, and World Weather, Inc. anticipates a few more bouts of rainfall in
the next few weeks further ensuring a
good production year.
All of this is occurring while there
is talk about recovering U.S. production in 2020. If that evolves as being
discussed, traders are going to be hard
pressed to find a good reason to run
futures market prices higher. ENSO
(El Niño-Southern Oscillation) neutral
conditions will prevail through the
first quarter of 2020 and possibly into
the second quarter as well. The lack of
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - December 17, 2019

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