U.S. corn and soybean yields were dramatically reduced by the drought and heat wave of 2012. Hints of the drought began in mid-May as the coverage of subsoil dryness rapidly increased. Drought conditions reached a breaking point in mid-June when it became apparent that unusual warmth dating to November 2011 would continue. Close monitoring of weather and soil conditions helped our customers manage their risk leading into and during rapid upward price movements in each crop.
Throughout 2012, the Pacific Ocean has warmed and the first El Niño event since July 2009 - April 2010 is beginning. Although the upcoming El Niño is only expected to be weak or moderate, it decreases the odds for a repeat drought in South America during the upcoming corn and soybean growing season. Heavy rainfall in August and early September across Argentina provide an additional hint that drought is unlikely, and t-storms in Brazil in recent days provide another hint.
Key wheat areas of Australia are often drier than average when El Nino exists, and dryness during key phases within the last month have already resulted in irreversible production losses.
The recent history of drought and the weakness of the upcoming El Niño limit potential weather implications for the U.S. winter and the ongoing / upcoming corn, soybean, and wheat growing seasons.
Mike Tannura
T-storm Weather, LLC
e: mike@tstorm.net
w: www.tstorm.net
ph: (312) 638-0993
toll free: (866) 475-7370
One Magnificent Mile
980 North Michigan Avenue
Suite 1400
Chicago, Illinois 60611
