Weather is running the North American commodity markets for now, as current supply and demand takes the backseat and farmers plan for a normal fall progression.
“The markets will look to the weather every week now,” says Arlan Suderman, chief commodities economist at brokerage INTL FCStone.
The U.S. National Oceanic and Atmospheric Administration declared the recent El Nino dead last week. Its Australian counterpart suggested it would be the case a couple of weeks ago.
Forecasters suggest fairly normal summer conditions should be experienced for the rest of the season. So, a lack of rain in the U.S. Midwest followed by earlier than recently experienced fall frosts can be expected for that region. That won’t bode well for delayed crops in either the United States or Canada.
Meteorologist Drew Lerner runs World Weather Inc., a Kansas City area agricultural weather firm. He suggested the growing degree days and heat units would have a lot of catching up to do if the crops that have been sowed or germinated late are going to accelerate enough for normal yields.
“In the Prairies, it was not a pretty picture. We certainly were saved by the rains in late June and early July. A lot of folks in Western Canada were teetering on the edge of complete crop loss (from drought),” said Lerner.
“For some, we are now back to significant drought conditions again. In southern Alberta, west-central Saskatchewan, except where sometimes severe thunderstorms have reached, and maybe the extreme southwest of Saskatchewan,” he said.
“We seem to be trending drier in the region overall, but there are some glimmers of hope out there. I’m still a little worried about southern Alberta for not receiving the greatest rain events that might be coming for the rest of the growing season (in the absence of El Nino),” he said.
If the U.S. Midwest gets into a hot, dry pattern it might result in more, regular rain events for the Prairies, especially in the eastern areas.
“It might even be enough that some folks in the eastern Prairies start complaining,” said the agricultural meteorologist.
“Most everyone on the Prairies will do better, with the exception of southern Alberta. Western portions of Alberta have been wetter and in the north. They need to see the sun and get some heat units up there yet,” he said.
“El Nino is basically gone. If you take El Nino out, that removed the warmth for the Prairies in September and that immediately opens the door to a normal progression into fall. We are not going to see an extended growing season.
“That may have its greatest effect on the Midwest, though, where an early frost would be another hit for those producers after such a wet and late year….
“I don’t know that I can remember a year when we have had both countries so far behind (in crop progress) in the same year.”
At the end of June, the Midwest states were 13 to 20 percent unseeded due to the wet conditions and most of the those that were seeded were planted late, said Suderman.
“The result is all crops would face an uncertain future after missing key growing days from their season. The potential of average or earlier fall frost dates due to the loss of the El Nino creates more risk,” he said.