USA - Weather threatens the entire soybean carryout

28.07.2021
The “Dome of Doom” lives on. This the high pressure system is centered in the Corn Belt and has been for well over a week. The forecast today has surged back to warmer and drier in the 14-day forecast, and it’s quite obvious the Dome has not subsided at all. In fact, it’s established itself smack dab in the middle of the Corn Belt, and is spinning rainfall off it (in other words, out of the Corn Belt) and into the west, east, and south instead). That will provide a great challenge to soybeans; essentially, the U.S. soybean yield is for the next five weeks at risk of significant yield loss. Yesterday, the weekly crop progress revealed a rapidly declining soybean crop, with a 2% decline in the G/E category (to 58%) and a 0.29 bu/acre decline in yield potential (-27 mb) to 49.14 bushels in the Pro Ag proprietary yield model. With 155 million bushels projected ending stocks and current yields between 0.7 bu. and 1.7 bu./acre too high (1.7 bu. would eliminate our entire projected carryout), this is an extremely bullish development. To lose an additional 27 million bushels a week for the next five weeks would imply a run to $16, and eventually $18 soybeans. The forecast is for more of the same weather (hot/dry) for the next two weeks. So, it’s not just possible, but likely we will lose 50 mb of soy production the next two weeks, if the forecast is correct. Note our soil moisture is also rapidly declining, with topsoil down 5% this week and subsoil down 2% – the cushion against drought is evaporating fast!  The key: Will drought last another three to five weeks or even longer? Or, will the weather pattern change? For reference, the weather pattern has been nearly constant all summer – hot and dry in the northwest Corn Belt, cool and wet everywhere else. Now the hot/dry forecast is centered in the middle of the Corn Belt. Corn is not nearly as much at risk as soybeans the next five weeks (mostly August). Corn silking is currently 79% (6% ahead of normal), and 18% is in the dough stage (1% ahead of normal).  So, 18% of the corn cannot be hurt by weather today and going forward. The same cannot be said of soybeans. In fact, double-cropped soybeans have virtually all the risk left for yield potential as they are mostly planted in late June/July. Corn yields can be affected, as evidenced by the 1% decline in G/E ratings last week to 64% rated G/E, with the Pro Ag yield dropped 0.8 bu/acre to 177.9 bushels (1.6 bu. below USDA). We lost about 72 mb of production last week, but it will be affected less each week going forward so the max production loss now might be 3 to 5 bu./acre (about 270 mb to 450 mb). That will not eliminate the ending stocks currently projected, but it would cut it as much as one-third. So while the yield loss potential is bullish for the corn market, it’s not as bullish as soybeans. No question, current forecasts/supply conditions are the most bullish for soybeans of the year. Perhaps that means we are close to a market top? In the weekly seminar Saturday morning (link below), we outlined some great reasons why current corn/soys chart patterns do not look like typical market tops. But perhaps it is coming shortly? We note that HRS wheat and barley continue their rapid decline to the worst conditions in U.S. history. HRS dropped 2% to only 9% G/E rating compared with 70% last year; this is a disaster of historic proportions!! Barley conditions declined an astounding 5% to 22% rated G/E (vs. 80% last year). Harvest is beginning, but it won’t take long since a lot has already been harvested in the form of baled hay as the crop was a complete failure in many Western areas. With 25% to 75% of normal yields expected in the East, it won’t take long to harvest that, either. But while it’s being harvested, since HRS wheat producers have the highest price in seven to eight years, it’s likely a lot will be sold off the combine (and may pressure prices for the few weeks it takes to complete harvest). We note that even sorghum conditions declined 2% (to 66%) last week as there was little rain anywhere in the U.S. production area. But most Southern U.S. crops (like sorghum) are rated pretty high yet as the summer has been perfect in Southern areas to date (and record yields are possible there). Winter wheat is 84% harvested, 3% ahead of normal, and winter wheat largely escaped the drought impacts in 2021. However, lingering drought into fall 2021 could impact 2022 crop prospects as well. So, the next five weeks will be very interesting. What will the weather bring? Will we lower soybean yields another bushel or more, and wipe out our entire carryout currently projected? Or, will rain (which currently isn’t in the forecast) rescue the crop? It’s time to place your bets, as the roulette wheel of summer weather is still spinning! Source - https://www.agriculture.com
RISK EVENTS

Europe - Around 66,000 ha damaged - 23 million euros in damages

02.07.2021

While Vereinigte Hagelversicherung VVaG reported 30,000 hectares damaged just a few days ago, this figure has more than doubled within a few days. A good 66,000 hectares were registered for regulation from June 18 to 25. This is due to so-called supercells, which came from France through Baden-Württemberg and Bavaria to Austria and the Czech Republic, causing hailstorms over a length of several hundred kilometers. Local heavy rainfall with enormous amounts of rain from so-called "water bombs" and hailstones the size of tennis balls caused damage to almost all crops, often with total losses. On June 22 and again on June 24, the damage area stretched from Lake Starnberg via Munich to Passau. In Baden-Württemberg, the Neckar-Alb region was hardest hit on June 21 and, just two days later, the strip from Freiburg via Reutlingen to Esslingen. A locally intense area of damage extended along the North Sea coast in the Groningen-Norden-Aurich triangle on both the Dutch and German sides of the border. In addition, abroad, the polder areas on the IJsselmeer and the Baltic region were particularly affected. After the first surveys, Vereinigte Hagel now expects damage of about 20 to 23 million euros, a doubling compared to the beginning of last week. Supercells and what they are about - currently no end in sight The background to the now considerably higher damage figures are so-called supercells, which have a much higher damage potential than ordinary thunderstorms due to their rotation and longevity. "Their most important feature is the so-called "mesocyclone," a powerful rotating updraft. It creates a negative pressure on the ground so that, like a vacuum cleaner, warm and energetic air can be constantly sucked in at the ground and reach the upper edge of the troposphere (above 10 km altitude). There the warm air is sucked in and there is also the danger of possible tornadoes. Subsequently, in the area of the sinking cold air, it is not uncommon for extreme downbursts to reach the hurricane range. Over time, supercells develop a momentum of their own that prevents the sinking cold air (as compensation for the rising warm air) from entering the warm air area. Thus, the mesocyclone is fed with warm air for several hours. Due to the longevity and massive power of the rotating updraft, hailstones can be flung into the air several times, growing into large hailstones. From Monday through Thursday, conditions in southern Germany were ideal for these rotating monsters. A warm and humid air mass was stored in the lower atmosphere, so to speak the fuel for the engine of the rotating mesocyclones. In addition, the wind near the ground came from an easterly to northeasterly direction (which favored suction), veered nearly 180° to the southwest up to an altitude of about 5 kilometers, and increased significantly. In short, there was sufficient directional and velocity shear. This is a basic requirement for the formation of rotation in the updraft region and helps to prevent the sinking cold air from reaching the front of the thunderstorm cell." And it's set to continue. The DWD forecasts heavy thunderstorms in the south and southwest of Germany on Monday evening, as well as on Tuesday. Experts prepared for this, because in June or July such weather phenomena are not uncommon, as Vereinigte Hagel knows from almost 200 years of experience. Source - https://www.freshplaza.com

26.08.2021

India - Crop loss imminent as IMD rules out rainfall till August-end in Odisha

With the India Meteorological Department (IMD) on Tuesday ruling out the possibility of any significant rainfall in the State till the end of August, drought seems to have become imminent. IMD Director General Mrutyunjay Mohapatra told media persons that 27 districts of the State have received 33 per cent less than the normal rainfall from June to August and deficit rainfall in August was 55 per cent. 

26.08.2021

Germany - 2021 wheat crop to fall 3.6% after adverse weather

Germany's 2021 wheat crop of all types is expected to fall 3.6% on the year to 21.37 million tonnes after poor weather, according to estimates released by the agriculture ministry on Wednesday. Crops suffered from swings in weather, with a cold spring followed by a hot, dry start to the summer and then unwelcome harvest-time rain and storms, the ministry said in preliminary forecasts for the 2021 harvest. 

26.08.2021

Egypt - Weather has caused a reduction in the mango harvest

There’s still a few more months left in the Egyptian mango season, but the year has brought significant challenges. The weather resulted in 30% less production this year, and the heat could be a threat to other Egyptian produce as well. Demand has been solid, but the lower harvest has resulted in a price increase. 

26.08.2021

USA - Severe weather destroys thousands of acres of crop in Fairbank

Thousands of acres of corn and soybean in Fairbank were destroyed Tuesday night after severe storms rolled through eastern Iowa. A clearer picture of the scale of destruction was made clear on Wednesday. Adrienna Olson with the Buchanan County Farm Service Agency says only a few reports from Fairbank and Hazelton Township have been reported. They include corn and soybean damage. 

26.08.2021

USA - Heat bears down on California grapes

California grape growers continue to contend with heat and drought issues. “There is ample volume of red and green seedless. There will be some shortages though I imagine,” says Philippe Markarian of Fresno, CA-based Mirabella Farms. “We won’t see them at the moment but it will be on red and black seedless grapes. 

26.08.2021

India - Farmers in Erode urged to insure crops for Kharif season

The district administration has asked the farmers in the district to insure crops under the Pradhan Mantri Fasal Bima Yojana (Prime Minister’s Crop Insurance Scheme) for Kharif season 2021 so that they can get relief for crop loss due to natural calamities, pest attack or disease outbreak in the current rabi season. 

24.08.2021

Online Agroinsurance Conference to be held on October 4-5, 2021

Due to the concerns around health safety of conference participants and in accordance with the guidance from the Georgian health authorities, AgroInsurance is forced to reschedule Conference to year 2022. More detailed information about new dates and arrangements will be provided in February 2022. Notwithstanding another reschedule of the Conference, AgroInsurance is committed to conduct the online webinar with 2 sessions on October 4-5, 2021. 

24.08.2021

Malaysia - Sarawak Disaster Management Committee to assist durian farmers

The Sarawak Disaster Management Committee is intent on working out a mechanism for durian farmers in areas under Covid-19 lockdown to bring out their fruits to the market. Its chairman Datuk Amar Douglas Uggah Embas said he would discuss with the divisional health department to work out a suitable arrangement.