Milling & Baking News - June 19, 2018 - 26

Weather Update

Dryness diminishes in Canada,
China and the United States
BY DREW LERNER

Recent weather anomalies around the
world have been reminiscent of 2007-08,
a period when trouble seemed to impact
nearly all major agricultural areas in the
world at one time or another. Production
cuts occurred in many areas, resulting in
a bullish bias in commodity futures prices.
Dryness this late spring has affected
portions of Canada's Prairies, the U.S.
northern Plains, Midwest, southwestern
Plains and desert southwest, parts of
southern Russia, Ukraine, Kazakhstan,
northern China and Australia. Too much
moisture has affected parts of central and

extreme in dryness during the third week
in May. Since that time there has been a
period of unsettled weather that brought
significant relief to key crop areas across
the Prairies. Significant rain reported in
early June saturated the topsoil in eastern Saskatchewan and parts of Manitoba.
Parts of western and northern Alberta
were just as wet as they were earlier this
year. The significant rain that came to
the Prairies evolved as the region transitioned out of the winter weather pattern
and into a summer pattern. This transition is still underway, but the greatest
change in soil moisture has occurred, and

Average 7-day topsoil moisture
ended June 11, 2018

northern Russia, delaying spring planting of wheat and sunseed, and parts of
India may trend drier into late June. And
we must not forget Argentina's drought
earlier this year and dryness in Safrinha
corn country of Brazil in recent weeks.
So, is this the start of another bullish run
in the marketplace?
Outside of winter wheat there are not
many bullish technical price charts out
there. It is a different world than 10 to 11
years ago, although we are approaching a
solar minimum just like back then. Some
analysts have suggested that solar minimums tend to bring volatility to human
behavior, and trading in the financial and
commodity markets have tended to be a
little more extreme at such times as this.
Weather is expected to play a role in the
market behavior as usual, but already in
recent weeks there has been some market
contribution from mother nature.
Drought that began in Canada's Prairies in 2017 refused to go away during
the winter. Spring weather conditions
became quite extreme for a while with
the Prairies soil moisture reaching an
26 / June 19, 2018

Milling & Baking News

a drift back toward drier conditions may
soon get underway.
Some central, west-central, southwestern and south-central areas in Saskatchewan and a few in east-central and interior
southern Alberta never received a good
soaking of rain. The outlook is now beginning to look a little drier as a new weather
pattern evolves, and this one may keep
the southern parts of the Prairies running
dry for a while longer. That could easily
return some moisture stress and resume
pressure on this year's grain, oilseed and
pulse crop production, despite the recent
relief from extremely dry conditions.
In the meantime, parts of the U.S. Midwest trended quite dry in the first week of
June with parts of eastern Iowa, Missouri,
Illinois, Indiana and Kansas experiencing
some significant declining soil moisture.
Crop stress was observed in many fields.
Part of the problem with dryness in early June came from May's record to near
record warmth across the Midwest that
kept evaporation rates running high even
though rain was falling periodically.
Similar to Canada's dryness relief,

the driest areas from eastern Iowa to Indiana received significant rainfall June
8-11, bolstering soil moisture with 2.5 to
nearly 4 inches of rain with local totals
approaching 7 inches. Particular relief
was experienced in these driest areas. The
relief from dryness was extremely important from eastern Iowa to Indiana since
these areas were not expected to suffer
from extreme dryness in 2018. The early
season trend was raising some significant
concern about a more widespread dryness problem this year. Now that relief
has occurred across these previously driest areas, the summer outlook calling for
the most significant dryness to be in the
western Corn Belt is back on track.
Already, Missouri, Kansas and the
Delta are quite dry and not likely to get
large amounts of rain anytime soon. The
southwestern Corn Belt always has been
the area most likely to deal with dryness
this year with some expansion northward
in July and August. The changes occurring in rainfall and soil moisture recently
raised the potential for the U.S. longer
range outlook to verify. That outlook not
only has the western Corn Belt trending
dry, but also allows bouts of cool air into
the eastern Midwest periodically to help
conserve soil moisture as rainfall trends a
little lighter than usual.
North America is not the only area of
dryness as noted above. Australia has had
a tough time getting rain in the far west,
but there has been some important rainfall recently that is supporting the planting of wheat, barley and canola. Western
Australia is not out of harm's way yet.
Additional moisture is needed to get this
year's crops planted, emerged and established. Southeastern Australia soil moisture and crop conditions are best.
Australia's most intensely droughtstricken region remains in Queensland
and northern New South Wales, where
very little rain has fallen in months and
little fieldwork and poor winter crop
stands are expected without significant
changes soon. The drought will live on
for a while.
Ukraine, Russia's southern region and
Kazakhstan have been dealing with dryness all spring, and it looks like the trend
will continue into the heart of summer for
at least a part of the region. Some of the
recent dryness has expanded to the northwest into Belarus and Poland. Portions of
eastern Romania and eastern Bulgaria also
have some significant dryness lingering.
Weather conditions in Eastern Europe
and western parts of Russia, Belarus and
western Ukraine are expected to be well
mixed in the balance of June. But wellmixed may not be good enough. A shortterm bout of relief - like that noted in
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Milling & Baking News - June 19, 2018

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