World weather impacts ag markets

Drought down under

The weather this past growing season was a difficult one for Australian farmers.

An extensive drought in eastern Australia during the growing season reduced crop production across the region. The drought was likely caused by the developing El Niño in the central Pacific region. Wheat production was reduced by an estimated 30 per cent from the previous year. 

During the past two months in Australia, summer temperatures soared to record-breaking levels. The warmest temperature recorded in Australia since 2014 was reported in Marble Bar on Dec. 27 at 39.3C. The summer crop production in Australia is limited by the hot, dry conditions, including sorghum production in Queensland. This will further tighten feed grain supplies in eastern Australia this year. 

South American contrasting weather

The conditions in South America are certainly moving the global oilseed markets this year. 

After a good start, conditions in Brazil deteriorated as warm temperatures and dry weather in the central growing areas of the country reduced oilseed yields. The ongoing dryness is a concern for the winter corn crop being planted in the central and northern growing as the soybean harvest progresses. 

Heavy rains causing flooding are the issues facing soybean and corn production in southern Brazil and northern Argentina. Rainfall amounts in December and January ranged between 1.5 to four times normal in the region, causing flooding. Although the rains will benefit the recently planted soybean crop, the flooded areas will reduce the total area. The contrast between this and last year in Argentina is quite stark, with flooding this year and an extensive drought during the past year. 

When we are dealing with wind chill and snowfall in our winter months, our minds tend to long for warmer conditions. The downside of summer weather is shown by the contrasting conditions in Australia and South America.

Bottom line

With temperatures approaching 40C in Australia, floods and droughts highlight the challenges in agricultural regions in South America. It is good to know that farmers are not alone dealing with adverse weather as the polar vortex swoops southward. 

Large parts of Canada have been locked under a polar vortex during the last few weeks. What’s happening weather-wise in other ag-producing parts of the globe? Tweet this

Bruce Burnett is the director of markets and weather at Glacier Farm Media. Bruce can be reached at bburnett@farmmedia.com or via the website at MarketsFarm.com.