La Niña could drive grain markets (again)

Global grain & oilseeds prices were somewhat supported throughout 2020/21 due to a La Niña weather event that occurred in the South Pacific from October 2020 to March 2021. The La Niña caused production issues, particularly for the Brazilian second maize crop. Off the back of global market support, nearby UK feed wheat futures increased by £23.90/t in this period.

Could a successive La Niña be on the cards?​

As we head into this period for 2021/22, Sea Surface Temperature (SST) anomalies in the South Pacific become a watchpoint, to help predict another La Niña weather event.
A La Niña weather event is when the South Pacific temperature drops more the 0.5°c below normal for the time of year. The cooler temperature will define the severity of the La Niña event, as demonstrated below.
La%20Nina%20graph%2029%2009%202021.PNG

Currently, by definition, the Pacific Ocean is in a neutral climatic state. However as of August 2021, the SST was at 26.9°C which is -0.45°C cooler than anticipated for the time of year. This means we are currently on a La Niña watch. The National Oceanic and Atmospheric Administration (NOAA) now anticipate there is a 70-80% chance of a “weak” La Niña in the South Pacific.

What does this mean for crops?​

Typically, a La Niña causes dryness in South America. In La Niña years, such as 2010/11 and 2020/21, Brazilian Safrinha maize yields dropped 13% & 27% respectively, year-on-year.


South%20American%20crop%20calendar%2029%2009%202021.PNG

As demonstrated by the table above, we are about to enter a very crucial time for South American plantings. If a second La Niña weather event occurs it could tighten South American maize production again. The current global grains outlook for 2021/22 is tight and therefore there is some reliance on decent South American crops to aid supply towards the end of the marketing year.
If South American crops don’t reach expectations, it would likely offer support to global grain prices similarly to the 2020/21 marketing year. In turn, this could also offer further support to domestic ex-farm prices.

La Niña could drive grain markets (again)

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As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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