A slowly developing La Nina is expected to bring moderate to extreme drought conditions to the US plains during the winter months, according to the US National Oceanic and Atmospheric Administration (NOAA).
Drought conditions are expected to persist across the Great Plains in the US, and in portions of the Rocky Mountains, especially further south, NOAA said in an update.
“La Nina conditions are expected to develop later this fall and typically lead to a more northerly storm track during the winter months, leaving the southern tier of the country warmer and drier,” the US weather agency said.
Key wheat growing areas to suffer
Drought conditions in the US plains are also expected to affect wheat production in the US.
The country’s farmers are sowing winter wheat crops, and are expected to harvest early next summer.
Wheat prices have been rising for the last few months as prospects of lower wheat crop in Russia and the US have raised concerns.
Dryness in the US plains and other important growing regions such as Russia is expected to limit global supplies of the staple crop to the lowest in the last nine years, according to the latest US Department of Agriculture forecast.
The US is the world’s fifth largest wheat producer.
Brad Pugh, operational drought lead with NOAA’s Climate Prediction Center:
Unfortunately, after a brief period in the spring of 2024 with minimal drought conditions across the country, more than a quarter of the land mass in the continental U.S. is currently in at least a moderate drought.
“And the winter precipitation outlook does not bode well for widespread relief,” Pugh added.
During the last week, about 52% of the US wheat growing areas have experienced drought conditions, which is up from 44% two weeks ago, according to National Drought Mitigation Center data.
IGC maintains global wheat production forecast
Meanwhile, the International Grains Council (IGC) has pegged the 2024-25 global wheat production at 798 million tons, largely unchanged from the previous estimate.
An upward revision of the wheat crop in Kazakhstan was offset by downward revisions in Argentina and Australia.
The estimate for global wheat consumption was revised upwards slightly, but the supply deficit was scaled up to 6 million tons. Consumption is likely to be around 804 million tons, up slightly from 803 million tons.
Russia imposes ban on grains imports from Kazakhstan
Russia temporarily banned imports of grains from Kazakhstan last week.
The transit of grain through Russian territory to other countries should, however, continue to be possible under certain conditions.
Russia’s measure is likely a retaliation in response to Kazakhstan banning imports from Moscow in August, citing the threat of excess supply in local markets.
According to Commerzbank AG, Kazakhstan is expected to produce its largest grain crop in 13 years.
Most of its grains are exported to Asia.
Commerzbank AG said in a report:
However, it relies on Russia for exports to Europe or the Mediterranean region.
This route is now going to be significantly more difficult.
A reduced supply of wheat from Kazakhstan could have a bullish effect on the global wheat price.
At the time of writing, the US wheat futures were flat at $5.729 per bushel.
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