What impact will the recent frequent occurrence of extreme weather have on the global crop market?

The days at the beginning of the new year do not seem so ordinary. When you turn on the news media, you can always see disaster weather happening in some corner of the world, from floods in Australia to severe drought in South America. In 2010, domestic agricultural products performed eye-catchingly throughout the year under the leadership of extreme weather. So, how will the recent abnormal weather affect crops? Will it lead agricultural products to another sharp trend?

How will floods affect crops in Australia? Edit this paragraph

From news media reports, we have seen that Australia has recently experienced extreme weather, and its eastern region, Queensland, has been hit by continuous heavy rainfall. , many cities were flooded, the damage was relatively serious, and the disaster spread to New South Wales and Victoria. So how much damage will the floods cause to Australia's domestic crop production? We analyze it from two aspects: Australia’s global position of crops and the actual impact of floods on crops.

Australia has a vast land, but most areas are arid, drier and lack water resources. The total area of ??agriculture and animal husbandry in the country is 490 million hectares, accounting for 64% of the country's total area; the arable land is 48 million hectares, and the irrigated land area is 1.62 million hectares, accounting for about 3.4%; the per capita agricultural and animal husbandry land is 25 hectares, the per capita cultivated land is 24 hectares, and the per capita forest land 7.8 hectares, ranking among the top in the world. As a major agricultural country in the world, its various agricultural products occupy an important position in world agricultural production. We can see from the data that Australia is the world's major exporter of crops such as barley, wheat, and sorghum.

Australian field crops mainly include barley, wheat, sorghum, oats, rice and other crops. The planting areas are mainly distributed on the east and west coasts.

Wheat: The cereal with the largest planting area. There is a continuous wheat planting belt of 4000KM across the country, with New South Wales and Western Australia being the main producing areas.

Barley: Mainly distributed in the wheat belt and some areas unsuitable for wheat cultivation. The largest producing area is Western Australia, with planting area and output accounting for about 40% of the country's total.

Corn and sorghum: mainly distributed in the eastern coastal and plateau areas, with western New South Wales and Queensland being the main planting areas.

Rice: The main production areas are concentrated in the plains of western New South Wales and Queensland. The floods that originated from the coastal areas of Queensland have engulfed many cities in the state and are now gradually spreading to New South Wales and Victoria. Judging from the distribution of crop planting areas, the main flow areas are corn and sorghum planting. belt and part of the wheat and barley belt.

Because Australia is located in the Southern Hemisphere, its crop growing season is basically opposite to that in the Northern Hemisphere. According to statistics, March to May every year is the key season for crop growth. Early January is not an important season for agricultural production. As far as Queensland, which is the most severely affected state, is concerned, judging from the planting, growth and harvesting seasons of various crops, wheat and barley planting in early January are in the slack period, and corn, sorghum and cotton are in the growing period. Early days. Also in New South Wales, wheat is at the end of harvest and barley is past harvest. Corn, sorghum, rice and cotton are in the growing stage.

Disastrous weather in South America will support soybean prices Edit this paragraph

Floods in Brazil and persistent drought in Argentina are recent problems faced by these two South American countries. As the world's major Agricultural producing countries Brazil and Argentina occupy a pivotal position in the world soybean trade. Judging from USDA statistics in 2009/10, the combined soybean exports of the two accounted for about 42% of the world's soybean exports.

Argentina is experiencing the worst drought in 50 years. In several provinces with developed agriculture and animal husbandry, rainfall has dropped by at least 50% compared to normal years. The soil moisture is insufficient and even drying out. A direct consequence of the dry weather is the delay in sowing South American soybeans, which was originally scheduled to be planted in November and December last year.

Therefore, in the latest global crop supply and demand report released by the United States Department of Agriculture, Argentina’s soybean production estimate for 2010/2011 was lowered to 50.5 million tons from 52 million tons in December. According to some recent statistics from Argentina's Ministry of Agriculture, soybean production in 2010/2011 will even be lower than 50 million tons due to this drought. Compared with 54 million tons in 2009/2010, there are 4 million tons. of reduction. The trend of dry weather will have the ultimate impact on the reduction of soybean production.

The psychological impact of extreme weather is expected to be greater than the impact on yields. Edit this paragraph

Argentina’s domestic crop cultivation areas cover a wide area, with the central region being an area of ??intensive crop cultivation. This dry weather will affect the planting areas of many crops. The recent floods that occurred in Brazil are mainly located on the northeastern coast. From the perspective of crop planting distribution in Brazil, this area is not a traditional agricultural planting area. Therefore, there is no substantial impact on agricultural production.

Weather conditions affect agricultural production, which is transmitted to the price of agricultural products. This logic is recognized by the market, so short-term weather conditions, especially the occurrence of extreme weather, have greatly increased people's expectations for future agricultural product prices.

At the same time, the eye-catching trend of agricultural products in 2010, as well as the expectations of global investors for the US quantitative easing monetary policy, this optimistic sentiment is likely to be further strengthened.

Therefore, we believe that the recent extreme weather in the southern hemisphere has had a certain impact on crop production, but it is more of a psychological increase in expectations of price increases, which will lead to price fluctuations. This situation may be similar to the price increase across the board for international agricultural products caused by the Russian government's ban on the country's grain exports around August last year due to the ongoing drought in Russia.