Market analysts pay attention to potentially dry year
Rain pelted down in February a couple of times in Saskatoon, giving the normally frigid city a distinctly Vancouver feel.
But the moisture delivered was small, nowhere near enough to make up for a dry fall and winter.
Now, it is early March and already a lot of the snow cover is fast disappearing.
The warm weather extends down into the United States grain belt where many areas of the Midwest and central and southern plains are as dry as they were going into the drought year of 1988.
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What is the cause of this weird warm weather – global warming, sunspots, La Nina?
The environment experts can’t give definitive answers.
Increasingly, grain market forecasters are mentioning how dry soils threaten the American corn and wheat crops.
With an average crop in the United States, analysts forecast a modest improvement in prices, but if drought cuts yields, sharp upward price spikes are possible.
Of course, a couple of good spring rainstorms can change the picture in short order.
In the last 10 days, rain in the Midwest has improved the situation greatly in southeastern Kansas and southern Missouri.
But a large part of Iowa and Nebraska are still designated to be in severe drought, and most of the Midwest is deemed to have had abnormally dry weather. See the U.S. drought monitor website at http://enso.
unl.edu/monitor/.
Farther south, almost all of Texas is considered in severe drought.
Long range forecasts call for less than normal rainfall to continue for the southern Midwest and southern plains into spring.
Short term, this means Canadian farmers should watch for a weather scare that could push the futures markets higher, opening opportunities to price some of their new crop.
But if we are indeed in a long-term warming trend, there are other issues to consider.
Recently the Globe and Mail ran a lengthy article on how a warmer climate would make the port of Churchill a far more viable and cheaper point of export for prairie grains and oilseeds.
Warmer springs allow seeding to begin earlier, but could make crop disease and pests a bigger problem on the Prairies.
Producers whose land is already drought-prone should consider the impact of less snow pack and greater summer evaporation.
All these experiences have implications for producers’ long-term planning and should not be ignored.