South America: Wetter Bias Persists in Brazil, Variable Outlook for Argentina

  • Brazil: Models continue to skew too wet, though actual rainfall risks are still elevated over the next 15 days. Central and Northern Brazil remain wetter in the 1–5 day and 6–10 day periods, expanding into Southern Brazil by days 11–15. A key concern is the second-crop (safrinha) corn establishment, especially in Mato Grosso and Goiás, where delayed planting and erratic rainfall threaten yield consistency.
  • Argentina: Wetter risks dominate the 1–5 day period, but a drier signal returns by the 6–10 day window, before moderating in the 11–15 day range. This transition will be critical for late-stage soybeans and corn as harvest approaches.

U.S. Outlook: Spring Corn Seeding and HRW Wheat Under Weather Stress

  • Hard Red Winter Wheat (HRW): The southern 2/3 of the Plains remains under significant dryness stress, with little relief expected over the next two weeks.
  • Midwest Corn Seeding: Excess rainfall continues to stall early fieldwork across the Eastern Corn Belt. CWG’s 16–30 day outlook leans drier, which could support seeding recovery, but confidence remains low due to teleconnection variability.
  • Critical 16–30 Day Outlook: A potential shift toward a positive PNA and rising Global Angular Momentum (GLAAM) in a neutral ENSO state could offer:
    • Wetter conditions for the drought-stricken Southern Plains (bullish HRW wheat),
    • Drier and more favorable planting windows in the Eastern Midwest (neutral-to-bearish early corn seeding delays).

Teleconnection Conflicts Introduce Forecast Volatility

  • MJO Phase 8: Weak signal expected; historically favors a warmer and drier pattern across the Midwest and Plains. Stronger MJO events could reverse that, but current model consensus assigns low probability.
  • EPO / NAO: Anticipated negative phases suggest a cooler, storm-track-suppressed outcome, especially across the northern U.S.
  • Model Divergence: CWG’s analogs (based on neutral ENSO) favor continued wetness in the Midwest and dryness in the Southwest Plains. However, the European ensemble diverges, creating low confidence in any single outcome.

Market Implications: Key Watch Areas

  1. U.S. Wheat (HRW): Drought risk persists. Watch for Plains rainfall signals in the extended forecast (April transition).
  2. U.S. Corn: Delayed planting risk remains short-term bearish, but a drier April could rapidly reverse sentiment.
  3. Brazil Corn (Safrinha): Wetter bias still in play but overestimated by models—local stress zones could emerge.

Strategic Takeaway:
Forecast risk remains elevated. The next two weeks will be pivotal in shaping early U.S. crop prospects and finalizing Brazil’s safrinha trajectory. Teleconnection shifts—especially PNA and MJO behavior—will be critical in driving April’s market tone. Traders should remain flexible and monitor extended model updates closely.

Source: Commodity Weather Group (CWG)