It was a relief to encounter real crop news last week instead of trying to read the tea leaves of the American economy.
China’s weather disaster and the potential effect on canola demand are covered in Sean Pratt’s story on page 6.
Meanwhile, oilseed markets were also assessing the results from too much rain in Brazil’s northern soybean area. This is expected to delay harvest of early seeded soybeans, tightening the immediately available supply. It could also downgrade quality and promote disease.
Frost in November and more recent hot dry conditions in Argentina caused the grain exchange there to reduce its estimate of the corn harvest to 20.5 million tonnes from an earlier forecast of 25 million tonnes. The heat also hurt soybean growth in Argentina, but recent rain has helped in some areas.
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The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
Frost also has been a problem in India, damaging its oilseed mustard and chickpea crops. The acreage of the oilseed mustard was already reduced and now frost in key growing areas has hurt plants and seed development.
Some estimates put the crop at 4.5 to five million tonnes, down from 6.2 million. A high tariff on canola oil and its premium price over palm oil prevent imports from Canada. But a shortage of domestically produced oil would force India to buy more palm and soybean oil and that would support oilseed prices generally.
Indian newspapers report the cold hit Rajasthan and Haryana, states in the northwest part of the country. The chickpea futures market in India edged higher on concerns that the cold might have also hurt that crop, called chana in India.
The cold is believed to have helped India’s wheat crop, encouraging more tillering.
Indian officials have been upbeat when discussing the size of the coming wheat harvest. They say it will match last year’s harvest of about 75 million tonnes or perhaps be better.
I wonder if they are being completely honest, because their open worries about last year’s crop and speculation that India would again have to import large quantities added a lot of momentum to wheat prices last spring, greatly increasing the cost of imports. In the end, the crop turned out well and India’s buying this crop year has been modest compared to the 5.5 million tonnes bought the year before.
According to the government, the area sown to wheat matches the amount of last year, but it took a long time to get it all seeded because of dry soil and input shortages.
From Oct. 1 to Jan. 31, most of India got only 50 percent of its normal rain. A significant portion of wheat went in the ground late. March weather will be critical to its development. If temperatures start to rise too soon, it will hurt yields.
