Forecast sees La Niña linger, with weather to support Black Sea production

Weather forecasts for the first half of 2018 suggest the La Niña effect may last well into the new year leaving the Black Sea poised for another bout of crop-friendly weather, Isaac Hanks, weather research analyst at Thomson Reuters told delegates Friday at Agritel’s Paris Grain Day.

If so, the weather could make for a continuation of some of the recent trends seen in global grain markets, with fears over the health of South America’s soy and corn crop balanced out by record crops in the Black Sea region.

La Niña is likely to be felt for much of March through May, bringing cool and wet weather to central and western parts of Brazil, and dry weather to south Brazil and Argentina, with the weather phenomenon’s effect likely to be felt through to 2020.

The long, dry spell across south Brazil and Argentina is causing concern for soybean and corn growers, with expectations building of a cut to estimates of both countries’ corn and soybean harvests.

For the Black Sea region, cool and dry weather is expected from March through May, critical months for the planting of crops when the precipitation is important to foster early establishment.

That will be followed by a June and August when the weather is likely to bring cooler weather than is seasonally usual, and moderately more rainfall through the key developing stages ahead of the harvest, Hanks told the gathering.

Conversely, Western Europe – including parts of France and Southern Germany – is likely to again see warm and wet conditions before giving way to above average temperatures and less rain through June and August.

This leaves the Black Sea poised to deliver another substantial harvest.

“It’ll be cooler than normal for the Black Sea and warmer than usual for the Mediterranean and Western Europe. Our best guess is that thing looks good again in the Black Sea,” Hanks told delegates.

Favourable weather across the Black Sea has helped propel Russia to its biggest grain harvest on record this season, producing a record crop and seeing wheat exports surge.

While the 2018/19 crop is likely to be slightly smaller, particularly as analysts are forecasting a reduction in area planted, the crop is still expected to be large.

Currently, the USDA in its most recent WASDE report is anticipating Russian production to top 85 million mt in the 2017/18 season, a rise of 17.2%, while Ukraine is expected to produce 25 million mt of corn – down 3 million mt on the bumper crop of 2016/17.