AGRICULTURE WEATHER WATCH: Heavy rains to weigh on palm oil production in Malaysia

Seasonably wet weather continues across Indonesia and Malaysia, according to USDA weekly weather and crop bulletin on Jan. 9

Heavy precipitation in major palm oil producing areas in Malaysia is seen weighing on harvesting activities and production, sources said.

Indonesia and Malaysia

** Heavy rains and flooding events are affecting parts of Peninsular Malaysia in end-December and January, according to weather reports and local media.

** As of Jan. 9, around 8,500 people have been displaced to relief centers in the country due to flood events with more heavy rainfall forecast over the whole Peninsular Malaysia.

** Industry sources expect a 1% cut in Malaysia's palm oil production of around 18.5 million mt in 2024 as heavy rains impede harvesting activities and logistics at oil palm plantations.

** Indonesia, the world's largest palm oil producer, has also issued warnings of heavy rain due to the North-East monsoon, which typically lasts from October to March, with strong winds and rough seas expected in the northern states and the country's east coast.

** Platts assessed crude palm oil FOB Indonesia at $850/mt on Jan. 10 for January loading cargos, up $11/mt on the day, S&P Global Commodity Insights data showed.

EU

** Scattered snowfall is likely over parts of Romania and Poland during the next two weeks, the European Centre for Medium-Range Weather Forecasts said Jan. 9.

** Europe is also expected to see a near-normal temperatures over the next two weeks, the agency said.

** Scattered rainfall is likely over to southern parts of France.

** Snowfall and rainfall may lead to a rise in moisture content in the planted wheat crop, and may delay the upcoming corn sowing, traders said.

** The European Commission, in its December update, has forecast the EU's cereal production in marketing year 2023-24 (July-June) at 270.9 million mt, against 269.1 million mt seen in the previous estimate.

** Platts assessed EU wheat with 11% protein content CPT Rouen at $241.25/mt on Jan. 10, up $0.25/mt on the day, according to S&P Global data.

Australia

** The El Nino weather phenomenon has likely peaked and is expected to weaken over the coming months, the Australian Bureau of Meteorology said Jan. 9.

** New South Wales, Victoria and Queensland are expected to experience heavy showers during the next two weeks, the bureau said. However, western parts of Western Australia are likely to see below average showers next week, it added.

** Excessive showers may cause some delay in ongoing harvest of wheat crop, traders added.

** Western Australia and New South Wales are the key wheat suppliers and drier conditions are expected to help pace up wheat harvest.

** Temperatures are likely to be above normal across most of Western Australia during the next two weeks, the bureau said. New South Wales, Queensland and Victoria are expected to see below normal maximum temperatures over the next fortnight, the bureau added.

** Continued rise in temperatures in Western Australia is likely to boost protein content in the wheat crop, despite a fall in output, traders added.

** The Australian Bureau of Agricultural and Resource Economics has forecast wheat harvest for marketing year 2023-24 (October-September) at around 26.2 million mt, down 34% year on year, which is expected to weigh on exports.

** Platts assessed FOB Australian Premium White wheat lower on the day at $296/mt Jan. 10, unchanged on the day.

US

** Dry weather prevails across the northern Plains and much of the Midwest, with temperatures exhibiting a classic El Nino signature.

** The Pacific Coast States witnessed increasing storminess following a mild precipitation, spreading farther inland across the Great Basin and Southwest.

** Moderate to major river flooding is expected across the Mid-Atlantic and Northeast over the coming week, along with significant coastal flooding.

** Winter storms are expected to produce heavy snow across the Cascades, Rockies, and Intermountain West, while blizzard conditions will persist across the western coast of Alaska.

** The Mississippi River at Vicksburg recorded a gauge reading of 9.42 feet on Jan. 10, recovering from the persisting low levels.

** The water level at Memphis dropped to minus 1.91 feet on Jan. 9, compared to 16.22 feet in the corresponding week last year.

** Platts assessed CIF New Orleans Corn at $200.2/mt, up $1.30/mt on the day, according to S&P Global data.

Brazil

** Water level in the Rio Negro River basin reached 19.68 m on Jan. 9, recovering from the lowest-on-record levels in the preceding months, according to the Port of Manaus.

** Rainfall with volumes greater than 70 mm are forecast in the Amazonas, Rondônia, Pará, Northeast of Amapá and Tocantins over the coming week.

** Rain showers are expected to exceed 50 mm in areas of Maranhão, Piauí, and Bahia, favoring the sowing and development of first corn crops.

** In the central provinces, intense rains with volumes between 100 mm and 150 mm will benefit soil moisture and the development of first crops.

** Pockets of dryness still persists, with unseasonably warm weather accompanied by widely scattered showers sustaining variable soybean prospects throughout central, northeastern, and southern Brazil.

** Platts assessed Brazil Corn FOB Santos at $212.98/mt on Jan. 10, down $0.30/mt on the day.

Argentina

** Locally heavy rains maintained favorable conditions for summer grains, oilseeds, and cotton throughout the country.

** North winds causing above-normal temperatures are expected in the north and west of the agricultural area over the coming week, with moderate readings extending towards the Atlantic Coast.

** A cold front accompanying heavy rainfall is forecast over the northern agricultural region, along with varied intensity rains elsewhere.

** Tropical winds are forecast to return by the end of the week, raising temperatures and moisture.

** El Nino is expected to continue until late in the fall, with precipitation positively accompanying the sowing campaign.

** Platts assessed Argentina Corn FOB Up River at $212.4 /mt on Jan. 10, up $2.07/mt on the day.