- Location
- Stoneleigh
The world is relying on record South American maize and soyabean crops in 2021/22 to support global supplies. But, dry weather already poses a risk to these crops.
Current high prices give the incentive for farmers to expand the areas of both maize and soyabeans. When looking forward, forecasters assume ‘typical’ weather. As a result, big crops of both maize and soyabeans are expected, which the world needs to meet current demand forecasts.
However, soils are already dry as planting begins in Brazil due to the 2020/21 La Niña weather event. La Niña weather events cause drier conditions in South America. The NOAA, US weather forecaster, currently puts the likelihood of another La Niña developing and lasting through November 2021 – January 2022 at 70%.
Argentinian crops could be affected as well. The Rosario Grain Exchange has warned that a La Niña could cut rainfall by 20-30% during the 2021/22 season (Refintiv). The country harvested less maize and soyabeans in 2020/21 than 2019/20, due to drier weather.
Whether a La Niña develops or not, the outlook shows drier than normal weather in parts of Brazil. If weather patterns develop in a similar way to last year, the dry weather arguably poses a greater risk to maize than soyabean crops.
Dry weather last autumn delayed the planting of the 2020/21 Brazilian soyabean crop. Safrinha maize crops are planted after soyabeans are harvested, so the 2021/22 Safrinha maize crop also went in late. The crop then faced drier than usual conditions during its reproductive phase, which cut yields.
A dry outlook for this autumn could again delay soyabean planting in Brazil and increase the risks for the 2021/22 maize crop. Good conditions in early-mid 2022 could help offset the impact of planting delays but this is not certain.
Global grain stocks are already forecast to be paper-thin by the end of the season. So, any threat to the South American crops is likely to spark more volatility in the market. This volatility will likely also filter through to UK prices.
Dry weather risk for 2021/22 South American crops
For information on price direction make sure to subscribe to Grain Market Daily’s and Market Report from our team.
Current high prices give the incentive for farmers to expand the areas of both maize and soyabeans. When looking forward, forecasters assume ‘typical’ weather. As a result, big crops of both maize and soyabeans are expected, which the world needs to meet current demand forecasts.
However, soils are already dry as planting begins in Brazil due to the 2020/21 La Niña weather event. La Niña weather events cause drier conditions in South America. The NOAA, US weather forecaster, currently puts the likelihood of another La Niña developing and lasting through November 2021 – January 2022 at 70%.
Argentinian crops could be affected as well. The Rosario Grain Exchange has warned that a La Niña could cut rainfall by 20-30% during the 2021/22 season (Refintiv). The country harvested less maize and soyabeans in 2020/21 than 2019/20, due to drier weather.
Whether a La Niña develops or not, the outlook shows drier than normal weather in parts of Brazil. If weather patterns develop in a similar way to last year, the dry weather arguably poses a greater risk to maize than soyabean crops.
Dry weather last autumn delayed the planting of the 2020/21 Brazilian soyabean crop. Safrinha maize crops are planted after soyabeans are harvested, so the 2021/22 Safrinha maize crop also went in late. The crop then faced drier than usual conditions during its reproductive phase, which cut yields.
A dry outlook for this autumn could again delay soyabean planting in Brazil and increase the risks for the 2021/22 maize crop. Good conditions in early-mid 2022 could help offset the impact of planting delays but this is not certain.
Global grain stocks are already forecast to be paper-thin by the end of the season. So, any threat to the South American crops is likely to spark more volatility in the market. This volatility will likely also filter through to UK prices.
Dry weather risk for 2021/22 South American crops
For information on price direction make sure to subscribe to Grain Market Daily’s and Market Report from our team.