Forecasts indicate improving weather in the Corn Belt in the coming weeks and grains could feel pressure
The new crop from the United States starts amid very different news about the conclusion of the 2022/23 season in South America. After a record production in Brazil and a historic drop in Argentina, the offer that will come from North American fields will have its development monitored more than constantly, for soybeans and corn. The area disputes are yet to be registered and the weather conditions in the coming weeks in the Corn Belt will determine the course of this battle.
The first projections of the USDA (United States Department of Agriculture) pointed to a maintenance of the soybean area, an increase for corn and wheat and a reduction for cotton. If all these possibilities will be confirmed only time – literally – will tell. Forecasts for the next 15 days are for better conditions for field work and development of the first corn sown areas, which already exceed 2% in the country.
“The temperature in much of the US will rise, which will provide a good planting window for the East Belt and Delta. In the north, the excess snow could still get in the way. Many talk about the possibility of reducing the area of the Dakotas and Minnesota,” says the Agrinvest Commodities team.
In the Commodity Weather Group bulletin, experts noted that these higher temperatures as early as next week in the Midwest and Delta could even improve soil temperatures in these regions, in addition to contributing to the melting of snow in the Northern Plains. . The maps below show that – in the central image, for the period from April 11th to 15th – the temperatures will already be much higher than the current ones for the heart of the belt.
On the map of NOAA, the official weather service of the US government, it is possible to observe the wait for warmer days in the period from April 14 to 20.
The rains, however, should still be moderate in the next few days in important grain producing states. “The GFS generated this Thursday afternoon (6) indicates, for the US, dry weather in most of the country’s producing region. Light accumulations are forecast for Nebraska, Kansas, far west Iowa, central column of Texas, east of Tennessee. Moderates in East Texas,
Louisiana, Mississippi and Alabama”, says the general director of the Labhoro Group, Ginaldo Sousa.
NOAA also brings in its map for the next 8 to 14 days slightly better rainfall only for the south-central part of the United States.
“The Drought Monitor for the week ended the 4th compared
with the previous week, he identified a worsening of conditions in northwest Minnesota, punctuated in west Texas. And we can identify significant improvements in drought conditions in north-central South Dakota, southeastern Michigan,” adds Sousa.
And it is all this information, still preliminary, that is gaining more and more space on traders’ horizons. Grain prices on the Chicago Board of Trade are already feeling the initial pressure and ended this week with lower levels than those observed at the end of the previous week, when the figures from the USDA reports (United States Department of Agriculture) – Prospective Plantings and Stocks Quarterly. According to Jerry Gulke, president of the consultancy Gulke Advisory, corn futures in the July contract lost almost 16 cents and December, 10 cents this week. For soybeans, the accumulated low was 13 cents in July and 10 in November. These are all important benchmark positions for the US crop.
“Last Friday – the day of the reports – was also the end of the month and the end of the quarter. We had some major reversals on March 31st and in early April the market tried to extend these gains and it didn’t, it went down and we went down significantly outside these maxims”, said Gulke to the AgWeb portal. “The market should reflect a considerable yield of corn, in addition to an increase in area for the cereal. In soybeans, the situation is tight, but we have to consider the flow of the Brazilian crop”.
The start of the 2023/24 harvest is still a little slow, bringing concerns to some regions, however, it is not the moment that defines the potential of North American production. There is still a lot of water to pass under the vintage and market bridges. The volatility, according to analysts and consultants, is just beginning. The reports, so far, are of field work in the initial stages, of preparation, outlining a scenario that is still quite different between the main producing regions.
Belts buckled, planters leveled, and let the new phase of the global grain market begin!
The photos below, published by AgWeb, register these differences.
