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AGRICULTURE WEATHER WATCH: US soybean crop conditions improve but corn yield distress continues

Highlights

Key wheat producing regions in Australia to see favorable weather

France, Germany to receive rains in next few days

Brazil, Argentina also set to witness rains

Late sporadic rains in some parts of the US Corn Belt in the week to Sept. 9 have aided crop yield expectations in many areas, but a substantial amount of corn yield is unlikely to recover with delayed rainfalls, market sources said.

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Meanwhile, August rainfall events in the major soybean producing region from southern Illinois through Ohio have provided much sought relief to US soybean crop conditions. While rains were scattered in most areas, heavy downpour occurred in some spots in Illinois, Iowa and Minnesota.

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The rainfall events have helped finish some late season growth and pod development for soybeans. Large areas in southern Minnesota, eastern Iowa, western Illinois and southern Wisconsin have mainly seen good-to-excellent crop conditions.

The US

** Drought conditions have expanded in portions of the southwestern Corn Belt, with the greatest impact seen in Nebraska, while also affecting portions of western Iowa, South Dakota and Missouri. There are also some drier areas in Indiana and Ohio.

** Weather agency Maxar in its latest rainfall forecast released Sept. 6 expects dry weather across the Corn Belt over the next few days, which will favor maturation and dry down the corn crop.

** S&P Global Commodity Insights, in its latest report, cut down marketing year 2022-23 (September-August) corn production estimates to 14 million bushels (355.6 million mt) from 15.1 million bushels last season.

** Corn yield estimates were also slashed, to 171.8 million bushels/acre, sharply below the latest USDA projections of 175.4 million bu/acre.

** Corn prices have been witnessing an uptrend in recent days, mostly led by weather issues in the US. The benchmark corn contract on the Chicago Board of Trade was at $6.73/bu at 3:54 am CT (0854 GMT) on Sept. 8, up 1.75 cents from the previous close.

Australia

** Most parts of Western Australia are likely to see normal rainfall through Sept. 23, Australia's Bureau of Meteorology said.

** However, some parts in the southern region of Western Australia may see limited and localized showers during the period.

** Western Australia and New South Wales are the largest wheat producers in the country.

** While traders and analysts estimated Australia's wheat output in MY 2022-23 (October-September) at around 33 million-36 million mt, the Australian Bureau of Agricultural and Resource Economics and Science has projected the wheat harvest at 32.2 million mt.

** Heavy showers at this stage of cultivation usually lead to an increase in the moisture content in the crop and dilutes the protein content.

** Likely normal showers in Western Australia are increasing hopes of slightly higher-than-expected output of milling wheat.

** Platts assessed Australian Premium White wheat at $362/mt Sept. 8, down from $375/mt a month ago. ASW prices have declined to $332/mt as of Sept. 8, down from $357/mt a month ago, S&P Global data showed.

The EU

** Agriculture powerhouse France could witness rainy days until Sept. 18, Mateo France said. According to the forecast, temperatures are likely to be below average and heatwaves are unlikely during the period.

** In the week beginning Sept. 19, temperatures may gradually turn above average, though severe increases are unlikely, it added.

** This could lift some pressure from the wheat crops, which have witnessed unprecedented heatwaves over the past few months, leading to a decline in wheat yields.

** Platts assessed France 11% wheat CPT prices at $331/mt Sept. 7, down from $357/mt a month ago.

** In Germany, rains are likely over western and southern parts over the next week till Sept. 14, according to the German Weather Service.

** Limited rainfall may improve the wheat crop condition in a localized manner.

** In Romania, there is a higher chance of showers till Sept. 19, while the average temperature is likely to be near normal to below normal.

** Industry experts expect overall yields of EU grain crops such as wheat and corn to be lower in MY 2022-23 (July-June) than in the last season, and any favorable weather change could support yields.

South America

** The southern states of Brazil are likely to receive more rain in the coming days, according to the latest forecast, which is likely to support the MY 2022-23 (February 2023-January 2024) first-corn planting in the country.

** The accumulated rainfall may exceed 60 mm from Sept. 6-12 in the northeastern Parana and northern parts of Santa Catarina, while in the extreme south of Rio Grande do Sul the accumulated rainfall may reach 40 mm, according to Brazil's National Institute of Meteorology.

** The planting of the 2022-23 first-corn crop reached 9% of the forecast area in Center-South Brazil as of Sept. 1, private consultancy AgRural said.

** Despite some frost in Rio Grande do Sul in August, weather conditions have been favorable overall for corn sowing and crop development in the three southern states, AgRural said.

** The first-corn crop in Brazil is planted from September through December and harvested February-May, while the second-corn crop is planted from February-March and harvested June-July.

** First-corn production accounted for nearly 21.8% of Brazil's total corn production in 2021-22, according to Conab, Brazil's national agricultural agency.

** Platts assessed corn FOB Santos for October loading at $293.68/mt Sept. 6, up 1.2% from the previous month, S&P Global data showed.

** In Argentina, rains should favor crops in northern Santa Fe and Entre Rios in the week to Sept. 16. Rains should maintain moisture in far northeastern areas for wheat growth, but dryness will expand in southern areas through the week to Sept. 16, according to MAXAR.

This article is part of a global weather watch series from S&P Global Commodity Insights, which will be published once in two weeks.