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Third time lucky for hard red winter wheat growers

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Grain farmers in the important southern US hard red winter wheat belt look unlikely to be dogged by drought for a third successive season of drought, with the expected El Nino potentially bringing too much rain.

The United Nations food agency, the Food and Agriculture Organization, said that history suggests that the El Nino weather pattern expected to kick-in imminently would mean "above-normal precipitation in southern and western states".

Strong rains in the southern US - where hard red winter wheat, the main US wheat class, is grown – would contrast with the drought which affected the likes of Kansas, Oklahoma and Texas for most of 2013-14.

Official data overnight rated US winter wheat at just 30% good or excellent as of Sunday, a historically low level - albeit down only 1 point from the same point of 2013, when the region was also beset by drought.

A year ago, some 45% of winter wheat in Kansas was rated "poor" or "very poor", nearly twice the figure in June 2012.

'Excessive rains'

The FAO said that in the October-to-March period of 2014-15, "short periods of excessive rains" could be the issue for farmers, to judge by the experience of previous El Ninos, of which there have been 22 so far since 1950.

Heavy rainfall "would be expected to have a limited negative impact" and "could delay plantings", although overall the effect could "possibly be beneficial for winter crop production".

The comments, in an alert on the potential impact of the forecast El Nino on world agricultural production, come as rains may already be posing some threat to the strong start that US spring crops, such as corn and soybeans, have made.

In fact, the agency said that, "northern parts of the US, including the Corn Belt in the Midwest, have tended to receive below average rains during the first six months of the year during an El Nino episode.

"However, the impact on rainfall variations weakens in the second half of the calendar year."

'May delay plantings'

The FAO also cautioned over the threat from ample rains to sowings in the southern hemisphere spring in Argentina, southern Brazil and Uruguay.

"The heavy rains late in the year may delay plantings of the cereal crops, to be harvested from March onwards."

In Asia, in the October-to-March period there is an "increased chance of below-average precipitation, historically concentrated in south eastern areas, Indonesia and the Philippines in particular", the FAO said.

The agency flagged in particular some threat to production of rice, a food staple, although markets are also concerned over the potential setback to palm oil output, of which Indonesia is the top producer.

However, the FAO was sanguine over Australian grains production prospects, flagging the threat of dryness in the east, but saying this may be offset by improvements in Western Australia, the top grain growing state.

"Previous events have caused wetter-than-normal conditions in Western Australia during the first quarter of the year, prior to the planting period in April and, therefore, the impact on cereal production is likely to be limited."

By Agrimoney.com

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