Argentina Sees Unexpected Strong Rains, Wheat Forecast Boost
Rains in mid-October and early November have helped subside some of the worries surrounding La Nina.
The Buenos Aires Grains Exchange forecasts the 2021/22 wheat harvest at 19.8 million tonnes, while the Rosario exchange sees it at 20.4 million.
Both estimates would set a record for wheat, which was 19 million tonnes set in 2018.
The rains have also helped boost corn and soybean planting.
BAGE sees 55 million tonnes for corn production and 44 million for beans; Rosario sees 55-56 million for corn and 48.8 million for beans.
FBN’s Take On What It Means: While bean plantings had been running near average, corn pace is behind. However, most corn gets planted in December and the rains may help quicken the pace. The rains were especially critical for wheat, with much of the crop entering key stages of the development when the rains started occurring. Harvest has slowed thanks to recent rains, though drier weather this week will support fieldwork.
Flooding in Canada Causing Shipping Delays
The port of Vancouver, which is Canada’s largest port, has lost all rail access thanks to floods and landslides.
The severe weather has shut down rail routes which Canada Pacific Rail and Canadian National Railway operate, halting the country’s largest rail companies from hauling grain.
While concerns are present, this is not expected to significantly alter Canada’s export outlook, due to the light harvest.
But, the rail disruptions are serious and could harm Canada’s economy if not fixed soon, especially with the holiday season here.
FBN’s Take On What It Means: While we do not expect this weather to result in any big export backlogs, the potential disruption to the economy is something that needs to be eyed. Already consumers are dealing with inflation and this hiccup could translate to even higher freight costs. This could result in Canada moving more grain to the U.S. in the near term via rail rather than to the port system. January canola futures fell 1.5% Wednesday as traders factored in transportation problems.
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