Skip to content

Looking hard

This week's FarmLead looks at the potential for a La Nina weather change.

Less buzz is being given to El Nino these days as more analysts are calling it off in the coming months, but new weather data suggests a La Nina event is coming down the pipeline! The team over at MDA Weather Services is making some pretty aggressive calls in saying that a hot, dry summer is in store for most of the major US agricultural production areas. The N.O.A.A. has admitted that the 2 events are the “extreme phases of a naturally occurring cycle”. While La Nina events have followed El Nino events closely a few times in the 1950s and again in the 1983/84 season, budding agtech company aWhere says that US crops will likely be more susceptible to El Nino conditions in the 2016 growing season, followed by La Nina in 2017. Looking hard at the rest of the world, an El Nino in the next few months could bring more rain to South America (even bigger crops!) while some drier conditions in the Southeast Asian markets (good for pulse markets, and likely a short-term bump for veggie oils)!

The Ukraine Ministry of Ag is reporting that 62 per cent (or 10.1 million acres) of fall-planted crops have emerged, of which 68 per cent is being categorized as in good or satisfactory condition, whereas 32 per cent is considered weak and thinned. Proportionally, 16.33 million acres of winter crops went in this year in Ukraine (down 10 per cent from last year), meaning 42 per cent of all winter crops are in good to satisfactory condition, while almost 20 per cent is considered weak or thinned. Next door, though the 2nd week of November, Russia has exported 14.7 milllion tonnes of grain this marketing year, which is down 10 per cent from the same period a year ago. The export tonnage includes 11.2 million tonnes of wheat, almost halfway to the expected 23 million tonnes with still 6.5 months to go. A few corporate farms over there have admitted that the quality of the wheat crop this year was lower, with “a bigger-than-average share” going into the feed category. They haven’t disclosed whether this was because of poorer weather or if it was an effect of crop input changes (i.e. fertilizer) with the ruble devaluation making it hard to buy the right stuff or the right amount of crop inputs. Could we see more out of the same from the crop that was planted this fall?

The Fryers Report reminds us that most bad crops in the Former Soviet Union states were not a result of bad fall or winter weather, but rather because of adverse spring or summer weather. With that being said, AgResource out of Chicago suggests that they’re not too concerned about the conditions that Black Sea farmers were planting into. I’ll remind them though that, the exacerbation of a poorer crop is only catalyzed by poorer spring/summer weather. Should we see some more adverse weather in the region in a few months, the poorer conditions that the crop went into dormancy under will be the main factor in the degradation of the crop size. Looking at this situation hard from all angles, we’ll agree with AgResource for now that nothing counts until it’s in the bin, but when there’s a forest fire warning out there, all you need is a little spark to light things off.

To growth!

Brennan Turner

Brennan Turner is originally from Foam Lake, SK, where his family started farming the land in the 1920s. After completing his degree in economics from Yale University and then playing some pro hockey, Mr. Turner spent some time working in finance before starting FarmLead.com, a risk-free, transparent online and now mobile grain marketplace (app available for iOS and Android). His weekly column is a summary of his free, daily market note, the FarmLead Breakfast Brief. He can be reached via email (b.turner@farmlead.com) or phone (1-855-332-7653).