What impact will "El Nino" or "La Nina" have on the 2013/14 harvests in the southern hemisphere?
The grain harvests in the northern hemisphere are slowly coming to an end. Although the harvest results are not yet 100% certain, no major surprises are expected. There is talk of a record harvest, but at the same time it is noted that the supply balance is just below the long-term average.
Changes to this assessment may be triggered by the upcoming harvests in the southern hemisphere. The wheat harvests in Australia and Argentina will be harvested in Nov/Dec 2013. The maize harvest in Argentina will not take place until March/April 2014.
Both countries are export-oriented, although in the case of Australia the focus is on wheat. In Argentina, maize exports are more important. The outcome of both harvests could once again deliver a significant change in global supply trends.
As things stand, the harvest prospects in both countries are negative. In Australia, drought in central growing areas in the west and east of the country has hampered crop development. In Argentina, frosts with temperatures as low as -5 degrees Celsius in the area around Buenos Aires and neighboring provinces have caused damage to the medium-high wheat plants to an extent that cannot yet be estimated. The current dry phase in Argentina continues to affect the wheat plants and is hampering the upcoming maize sowing for the 2014 spring harvest.
The development of the weather in the near future is of great importance. Two typical weather phenomena could occur in the coming months. El Nino is associated with a rainy period in South America and drought in Australia. La Nina has the opposite effect. The weather constellations are triggered by the unusual surface temperatures of the southern equatorial current in the Pacific. Weather observation stations continuously measure temperature trends in order to detect the first signs of an impending change in good time.
The Australian Bureau of Meterology is in charge of this and evaluates and publishes the measurement results at regular intervals. According to the latest data, the government institute does not expect any fundamental deviation from the neutral situation over the next two months. At least for the wheat harvest, no further significant impairment is to be expected. The further development in spring 2014 is not yet entirely certain.
If this assessment remains unchanged, there will be hardly any major corrections to the harvest results to date. This means that the harvests in the southern hemisphere will no longer have a serious impact on the global supply situation in the grain sector and therefore on price trends over the course of the 2013/14 marketing year. The range of price fluctuations will be much narrower than in previous years.
