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By Tori Uhland

May 3, 2024

The weather forecasts have continued to dominate the market as excess moisture or lack thereof are impacting crops around the world at crucial times. The month of April was friendly to the wheat futures, but not so much the crop itself. Dry weather has parched the wheat crops in Russia and in western Kansas. Wheat does have nine lives though, and they may not have run out yet. Russia’s crop has been due for some rain after record warm temperatures last month. Average to cool temperatures are expected in Russia for the first half of May, and this may be a savior to their crop after an unusually dry spring. Southern Russia experienced their driest April in a decade. That area grows over 30 percent of Russia’s wheat crop. Their spring is comparable to their 2012 crop when Russia’s all-wheat yield had the worst performance of the post-Soviet era. Crop problems in Russia could help the US export numbers. This would be a big help to rebound off of the 52-year low export number in the 2023-24 crop year. Dry weather and good exports give support to the futures prices.

Last week, the Buenos Aires grain exchange cut their estimate for Argentina’s corn harvest by 3 million metric tons. This is due to damage from the leafhopper insect plague and the hot, dry weather in March. Around 17 percent of the area impacted by leafhoppers and weather is now unharvestable. The leafhopper carries harmful bacteria that causes stunt disease, which hinders growth and can result in ears of corn with loose or missing kernels. The Argentine corn crop was once expected to be a record with estimates as high as 56.5 million metric tons, but now is down to 46.5 million metric tons. This harvest will now end as one of the smallest in the last seven years, above only the drought years of 2017-18 and 2022-23. Argentina is the world’s third largest corn exporter.

The March weather that negatively impacted Argentina’s corn crop could also impact their soybean crop. The Buenos Aires grain exchange kept their soybean harvest estimate at 51 million tons last Thursday, but bean harvest is only 36 percent complete, so a cut could still be possible. Argentina is also a top supplier of soybean meal and soybean oil.

While drought has impacted parts of the US wheat growing areas and Russia, along with Argentina, some spots in the US Corn Belt and in Brazil have been receiving too much moisture. Ample rains and cooler temperatures in the US Corn Belt are slowing planting progress, giving a boost to the markets. In Brazil’s second biggest soybean production state, Rio Grande do Sul, they are also experiencing heavy rains that are disrupting their harvest and causing some losses to the crop.

On top of the numerous weather events making waves in the markets, geopolitical tensions have continued to have an impact as well. There have been new Russian attacks on Ukrainian infrastructure in the port city of Odesa. There are also ongoing risks in the Middle East as attacks could have big implications for the energy markets, which would in turn impact corn and soybeans.