Bad weather for competitors generally means better fortune for Canadian farmers.
But it’s too soon to tell whether Australia and South America have been hit by a long or short-term weather problem.
“It’s not showing up in the prices yet, but it’s being watched,” said broker Ken Ball of Benson Quinn-GMS in Winnipeg.
“If the rain doesn’t show up by the end of October, the markets will definitely wake up.”
Dryness has hit Australia, Argentina and Brazil. Western Australia has also been hit by frost, damaging the yield prospects for its winter wheat crop, which is now heading.
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Canadian Wheat Board weather analyst Bruce Burnett said northern Argentina needs rain soon because its wheat crop is in the heading stage, when yield potential is set.
The crop isn’t suffering drought, but does not have enough moisture reserves to make it to harvest unaffected.
The same situation prevails across Australia.
“They haven’t got enough to finish,” said Burnett.
The southern hemisphere’s seasons are exactly opposite to the northern hemisphere’s, so producers there are watching their crops move through the spring growing season.
The recent dryness is a surprise after good conditions all winter.
“A month and a half ago things were looking fairly good in the southern hemisphere, but now they have some problems they’re dealing with,” said Burnett.
Last week the American National Oceanic and Atmospheric Administration announced that it believed the El Nino weather effect was occurring. El Nino appears when water in part of the Pacific Ocean heats up. The warmer water creates a warmer air mass above it, and as the air mass moves, it changes normal patterns for heat and precipitation.
In the southern hemisphere it fairly consistently produces warmer and drier conditions than average, conditions similar to those now being experienced by southern hemisphere farmers.
It is too early to say whether there is any direct connection between this El Nino and those dry conditions, analysts say.
David Phillips of Environment Canada said the northern hemisphere’s El Nino effect often reduces major storms in the Atlantic. The warm air masses that flow from the west appear to stop the type of tropical storms that have recently been ravaging the Caribbean and Florida.
This El Nino appearance has just begun, so it is impossible to say whether it is responsible for stopping the string of Caribbean storms, Phillips said.
But the ending of the storms is an interesting correlation, he said, and if the El Nino develops and grows more powerful, and storms do not reappear, people will probably give El Nino the credit.
