The U.S. grain markets are searching for bullish news to grab ahold of: better export demand, South American crop risks, and the potential for a summer 2024 drought.
With crop exports lacking any substantial optimism and large corn and soybean crops expected for Brazil and Argentina, a 2024 summer drought in the U.S. is next on the docket for a bullish story. But is a summer drought something to be worried about yet?
Of course, drought is always a worry, especially following three consecutive years of dry conditions in the Corn Belt. The primary influencer was the La Niña weather pattern that brings cold waters into the Pacific Ocean and off of the U.S. West Coast. Now, the more prominent but fading El Niño pattern still has the potential to set U.S. crop producers up for a favorable growing season.
“It’s all about cold water off the west coast,” said Eric Snodgrass, principal atmospheric scientist with Nutrien Ag Solutions. “That’s our only pre-season indicator.”
Historically, cooler water off the west coast of the U.S. influences the jet stream patterns and where precipitation tends to fall.
“Nearly all major, widespread drought events in the Central U.S., Corn Belt, and Midwest were preceded by rapidly cooling sea surface temperatures in the North Pacific,” said Snodgrass. “The regions to watch are the Gulf of Alaska and the Baja of California.”
Snodgrass said that if these areas cool off, drought risk increases for the Central U.S. However, he said those alarm bells are not ringing yet.
Vulnerabilities remain for drought expansion in the spring and summer, highlighted through current soil moisture levels. NASA satellite data imagery shows heavy moisture deficits for much of the Midwest and eastern Corn Belt region.