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Inside Grains & Commodities

Rain in Australia, drought in Argentina due to La Niña

30 November 2021 - Jurphaas Lugtenburg

Australian grain growers are heading for a top harvest. This is evident from the yield estimate of Abares, the economic and scientific bureau of the Australian Ministry of Agriculture. Whether the arable farmers will succeed in fully cashing in on the potentially large harvest is uncertain. The weather phenomenon La Niña may throw a spanner in the works throughout the southern hemisphere.

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Abares estimates Australia's grain harvest at a record 58,4 million tonnes. The largest harvest ever is expected for the province of Western Australia with 21,2 million tons and for New South Wales the second largest harvest with 17,8 million tons. Due to sufficient rainfall during the growing season, a 5% larger harvest is expected than last year when the country set a new record.

Quality is declining
La Niña is still causing rain in eastern Australia. This causes problems with the harvest that has started. A small part of the harvest may be lost due to flooding. According to local sources, rain during ripening causes the quality of the grain to deteriorate. For example, baking wheat is reduced in quality and sold as feed wheat. "This takes the shine off the season for some farmers," says Jared Greenville, director of Abares at ABC News.

On the other side of the Pacific Ocean in the southern part of Brazil and in Argentina, La Niña actually causes less precipitation than average. The soy is sown there and needs rain to germinate. With the exception of some local showers, weather models predict no significant precipitation in Argentina and southern Brazil for the first half of December. Local sources are therefore concerned about the rise of soy and the consequences that the poor start has on yield potential.

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