UPDATE for June 1st, 2023
Is 2023 a Prelude to Another Developing Dust Bowl in 2025?
The first weekly crop ratings from the USDA were released Tuesday afternoon. This year’s initial corn rating came in at 69% GD/EX, lower than we’ve seen the past couple of years which could put the current USDA’s estimated 2023 average corn yield of 181.5 in doubt. Considering the current dry conditions in much of the Corn Belt its not unrealistic to think that the trade could soon be debating an average yield closer to 175 this season. When you reduce the current projections of 181.5 bushels per acre on 92.6 harvested acres to 175 bushels per acre, 600 million bushels disappear from the balance sheets which creates a much less burdensome outlook.
The Pro Farmer Crop Condition Index is a weighted program that uses the USDA weekly conditions readings to calculate ratings based on a 500-point scale, a score of 500 represents a perfect score. This week’s initial ratings start the
Pro Farmer CCI season at a point value of 375.9, which is 6.7 points lower than we began the 2022 growing season.
It’s not a news flash but, so much of what is going on in China affects us here in the U.S. in many ways. When the government finally lifted the Zero Covid policy near the end of 2022 analysts believed China was on the road to a quick recovery. Since the end of January though the stock market has tumbled following gains earlier that month as fear is dominating the market. China’s official manufacturing purchasing managers index fell in May to a 5-month low of 48.8 and was the second straight month of reductions in the factory sector. The Chinese government also announced a resurgence of Covid cases which experts believe could reach up to 65 million new cases per week by month-end has re-inserted a great deal of uncertainty back into the market. When the world’s second largest economy and the #1 global consumer of commodities struggles, the rest of the world worries.
Once again Russia is threatening to end the Black Sea grain agreement. Moscow has repeatedly warned the West that unless sanctions are removed that restrict the export of Russian food and fertilizer products they are prepared to end the safe passage agreement. During a recent visit to Africa, Russia’s foreign minister said that the agreement “had not been fulfilled at all”. In reality the exports of many of these items is not sanctioned by the West but Russia says these exports are hindered because of the restrictions placed on payments, logistics and insurance. What has been stopped since the start of the conflict though is the pipeline that runs through Ukraine used by Russia for the transportation of Russian ammonia. Ukrainian leaders believe this may be the key issue that needs to be resolved in order to secure a long-lasting, reliable agreement for their Black Sea exports. (Reuters)
Sunday night a Russian drone damaged infrastructure at the Ukrainian port of Odessa. Ukraine’s military told of the attack but the full extent of the damage is still unknown so how this will impact grain exports from this key port is yet to be determined. Early Monday Russia carried out more attacks using drones and cruise missiles in multiple regions including the capital, Kyiv. (Reuters)
Brazil harvested a record soybean crop this season and a record Safrinha crop is also expected. In the past, one of the major issues that hampered grain exports was the capacity of the country’s ports. Improvements have been made and this year Brazil’s largest private port terminal is expected to see the volume of exports increase by 6.8% to a record of 12.5MMT a direct result of the record production. This terminal, Tiplam at Santos is quite versatile in its capabilities to move various products which include soybeans, corn, sugar and fertilizer. The general manager of the port explained that the flexibility at this port allows them to “prioritize the loads according to the queues of ships.” Currently Brazil is exporting large amounts of soybeans which is expected to last through mid-July. Corn exports ship in August and September, the sugar exporting season runs longer but reaches the peak between June and September.
We have seen a lot of market volatility in regards to weather outlooks since early last week. When the GFS or EURO models offer a change in the pattern the markets react accordingly. Additionally, NOAA is now warning of a risk that a “rapid onset drought” may develop in some areas and currently there are no major changes in temps or precipitation forecasted through at least mid-month. World Weather Inc. also forecasts ongoing dry conditions and says the Gulf of Mexico has been “shut off as a moisture source” and does not foresee a change until mid-June.
The first map below shows the area at most risk for a rapid drought onset. This is followed by a map that shows corn production by county to use as reference. The location of where such a situation develops greatly determine its long-term consequences on production.
If you’ve been reading my newsletter for several years you may remember some of my long-term weather outlooks from my favorite ISU climatologist, Elwynn Taylor. He determined that weather cycles throughout history tend to repeat themselves in certain intervals and used tree rings to back up his outlooks.
During the 2020 Iowa Power Show in Des Moines Taylor presented some of his findings. He explained that the Midwest goes through an 89-year cyclical pattern of mild climate conditions followed by “turbulent” climate conditions.
“18 years in a row had fairly consistent yields and increase to yields due to corn breeders, 25 years in a row volatile weather [followed], 18 years fairly consistent, and then we go into 25 of volatile – that’s where we are now, in the years that can have greater variation.”
“If you look at the weather on a particularly good year, or a particularly bad year, 89 years before that, probably the same thing happened. This has been this way for 400 years. We know that from the oak trees that are still around. That is the way our weather pattern goes.”
You're probably wondering what significance this has with our present outlook and why I’m sharing this old information from 2020… Taylor explained.
“Because, right now, we are in one of those patterns and we will be getting out of it after 2025 and if it hits right , we are going to have a Dust Bowl — these things are 89 years apart. The Dust Bowl was in 1936. Add 89 to that. It’s 2025. If it is going to be a Dust Bowl in this century, it’s hitting us in 2025 and we are right at the four years build up to that now. Look back and see what the buildup was in the records back in the ’30s. That’s what we’re expecting for weather volatility at this time.”
The map shown above provides precipitation totals found during the Dust Bowl year of 1936. In addition to the drought, overall temps from that summer remain the hottest on record for the state of Iowa. Temperature highs in the Quad Cities did not fall below 100 degrees for 11 consecutive days from July 5th through the 11th. This stretch was followed by the incredibly high reading of 111.3 degrees on July 14th, the low for the day only dropped to 84 degrees. It remained so warm indoors even during the overnight that many people chose to sleep outside where temps ranged in the low 80’s.
Don’t jump to the conclusion that 2023 will be anything like 1936 or 2012 and the hot, dry summer those years but those 2 years in particular resemble conditions we see now. And the longer we go without breaking out of this dry cycle the greater the chances are that those unfavorable crop conditions will prevail.
The most updated information continues to show that the upper air pattern is being controlled by a “rex block” that has troughs in the east and west divided in the middle with ridging. Right now, the ridge or high pressure is centered over the Upper Midwest.
Today and tomorrow some moisture will be introduced which could raise CAPE levels above 500j/kg. This should spark some late in the day and evening thunderstorms in some lucky areas. However, the rainfall will be spotty and light in most areas.
The spotty rainfall will not be sufficient to bring rainfall totals anywhere near normal. The 10-day EURO map below shows a massive portion of key U.S. crop growing areas will continue to see rainfall deficits increase.
