Dry Weather in Ukraine and the Russian Federation Continues to Worry Traders

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Favorable Rains in North America and Western Europe

In the USA, Canada, and Western Europe, recent rains have been beneficial for crops. However, the ongoing dry weather in the Black Sea countries, particularly Ukraine and the Russian Federation, is raising concerns among traders about the potential for future harvests.

Weather Conditions in North America

United States: The Midwest and Plains have experienced favorable weather conditions. Although rains are expected to slow down planting in the coming days, they will help replenish soil moisture and improve crop conditions. Farmers are actively sowing spring wheat and corn, aiming to complete planting by next week. Normal temperatures are anticipated to support crop development.
Canada: Intermittent rains in the Canadian prairies have delayed planting. Another wave of rain and cooler temperatures is expected next week, which will further delay planting but improve prospects for canola and wheat in drought-affected areas.

South American Weather Impact

Brazil: Heavy rains in the south are delaying soybean harvesting, which is 96% complete across the country. The first corn crop is 75% harvested, and the second crop harvesting has started. Rain is expected to spread northward, benefiting second-crop corn, though the main producing state, Mato Grosso, will remain dry.
Argentina: Dry and cold weather over the next 7-10 days will expedite the harvesting of soybeans and corn. However, potential frosts may negatively impact the sowing and rooting of winter wheat.

European Weather Conditions

Western Europe: Much of Europe, particularly France and Germany, will continue to see rain next week. Excessive moisture combined with low temperatures could negatively affect crops. Eastern Europe, still experiencing a precipitation deficit, is also expected to receive rain.
Australia: Good seeding rainfall is expected next week. Favorable water temperatures in the Pacific Ocean suggest a potential La Niña scenario, which could increase the likelihood of needed precipitation for winter crops.

Dry Weather in the Black Sea Region

In Ukraine, Romania, Moldova, and the southwest of the Russian Federation, dry and hot weather is reducing harvest potential. This weather pattern remains a key factor supporting wheat prices on global exchanges. Rainfall in April and May was significantly below normal, but a front from Western Europe is expected to bring rain and lower temperatures to Bulgaria, Romania, Moldova, and parts of Ukraine next week.

Mintec Global

Weather Forecast in the Russian Federation

In the European and Asian parts of the Russian Federation, dry and warm weather is expected over the next 7-10 days, which will be favorable for completing sowing delayed by frost and rain. Heavy rains in the North Caucasus, Western Siberia, and Primorsky Krai will benefit spring wheat crops. However, continued dry weather in the Black Sea regions is reducing the yield potential for winter wheat.

Conclusion: Factors Influencing Grain Prices

Several factors could determine whether grain prices will rise, remain stable, or fall:

Weather Conditions: Favorable or adverse weather in key growing regions will significantly impact crop yields and market prices.
Planting and Harvest Progress: The pace of planting and harvesting activities, especially in regions facing delays, will influence supply expectations and price trends.
Global Demand:Changes in global demand for grains, driven by economic conditions and consumption patterns, will affect market dynamics.
Trade Policies: Any changes in trade policies, tariffs, or export restrictions in major grain-producing countries can impact global supply and pricing.
Climate Predictions: Long-term climate forecasts, such as the potential La Niña scenario, will play a crucial role in shaping agricultural conditions and market outlooks.

Monitoring these factors will be essential for understanding future trends in grain prices and market conditions.