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Reversals? Be patient and keep it simple.

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This week marks the onset of a drier weather pattern in the core grain belt, expected to continue into the first half of August, barring any unexpected tropical moisture. Temperature fluctuations will persist through the end of July, with alternating periods of hotter and cooler air. This should maintain relatively stable grain crop conditions, despite minor degradations due to drier conditions. However, extreme and persistent heat will affect the Central West, Central Northwest, and the Canadian Prairies—areas we identified last year as likely to experience drought-like conditions.

In these regions, crop conditions could deteriorate significantly, raising substantial concerns for crop production. Vulnerable crops include oats, canola, and spring wheat, with corn and soybeans also at risk in smaller areas.

Internationally, the ongoing historic drought in Russia and Ukraine continues to severely impact crop prospects. As the fourth largest corn exporter and the top wheat exporter globally, this region faces an anticipated decline in corn production by 15% to 20% and a 10% to 15% drop in wheat production. This significant reduction in key grain supplies is likely to prompt export restrictions soon.

In the European Union, France, the leading wheat producer, is expected to see a 15% reduction in wheat output to a five-year low, due to severe flooding this season. In China, the core grain belt areas of Central and Northeast Central China are experiencing notably worse conditions than usual, due to a continuously hot and dry season.

India's breadbasket in the Northwest is showing a dramatic reduction in crop health compared to last year, likely leading to weaker yields than currently anticipated by the market, with a hot and uneven monsoon season to blame. Important crops affected include rice, cotton, and sugar. West Africa is also facing vegetative health challenges due to ongoing drought, which may worsen, impacting the cocoa crop.

Additionally, the Western Corn Belt in the U.S. is experiencing notably poorer vegetative health compared to last year due to hot, dry conditions, and the Central Northern Corn Belt is suffering due to excessive flooding.

Overall, global crop production has faced significant challenges this year, marking it as a particularly difficult year for agriculture.