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Investor's Crypto Daily > Blog > Headlines > Financial Market News > La Nina could cause a drought in the US and affect winter wheat crops
Financial Market News

La Nina could cause a drought in the US and affect winter wheat crops

Last updated: October 21, 2024 2:57 pm
By Chad McAuley 4 Min Read
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According to the US National Oceanic and Atmospheric Administration, a slowly developing La Nina will bring moderate to severe drought conditions to the US Plains during the winter.

Contents
Wheat growing areas in key areas to sufferIGC maintains global production forecastRussia bans imports of grains from Kazakhstan

NOAA’s latest update said that drought conditions are expected to persist in parts of the Rocky Mountains and the Great Plains, particularly further south.

The US weather agency stated that “La Nina conditions will develop later this autumn and typically lead to more northerly storm tracks during the winter months. This will leave the southern tier warmer and drier.”

Wheat growing areas in key areas to suffer

Wheat production in the US is also expected to be affected by the drought conditions in the US Plains.

Farmers in the country are expected to harvest winter wheat crops early next summer.

Wheat prices have been increasing for the past few months due to concerns about a lower wheat crop in Russia or the US.

According to the latest US Department of Agriculture Forecast, the dryness in the US Plains and other important growing areas such as Russia will limit global supplies of staple crops to the lowest levels in the last nine year.

The US is the fifth largest wheat producer in the world.

Brad Pugh, NOAA’s Climate Prediction Center’s operational drought lead:

Unfortunately, after a brief spring 2024 period with minimal drought conditions, more than a third of the U.S. continental landmass is currently experiencing a moderate drought.

Pugh added, “And the winter rainfall outlook does not bode a good thing for widespread relief.”

According to National Drought Mitigation Center, 52% of US wheat-growing areas experienced drought conditions during the past week. This is an increase from 44% just two weeks ago.

IGC maintains global production forecast

The International Grains Council (IGC), however, has estimated that the global wheat production in 2024-25 will be 798 million tonnes, which is largely unchanged from its previous estimate.

The downward revisions to the wheat crop in Argentina and Australia offset an upward revision in Kazakhstan.

The estimate of global wheat consumption has been revised up slightly, but the deficit in supply has been increased to 6 million tonnes. The consumption is expected to be around 804 million tons, up from 803 millions tons.

Russia bans imports of grains from Kazakhstan

Last week, Russia temporarily banned the import of grains from Kazakhstan.

Transit of grain from Russia to other countries must continue to be possible, but only under certain conditions.

Russia’s action is likely a response to Kazakhstan’s ban on imports from Moscow, which was imposed in August citing the threat that local markets would be oversupplied.

Commerzbank AG predicts that Kazakhstan will produce its largest grain harvest in 13 years.

The majority of its grains is exported to Asia.

Commerzbank AG stated in a recent report:

It relies on Russia to export goods to Europe and the Mediterranean region.

This route will now be significantly more difficult.

A reduction in the supply of wheat from Kazakhstan may have a positive effect on global wheat prices.

The US wheat futures are flat at $5,729 per bushel.

This post La Nina threatens US drought may affect winter wheat crop can be modified as updates unfold

This site is for entertainment only. Click here to read more

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