Monday, August 9, 2021

Weather Report with Greg Oddo

Frost season is drawing to a close in Brazil with little in the way of significant additional cold threats in the picture.

Brazil’s climatological frost ‘risk-period’ generally ends with the final week of August, but even then, it is extremely difficult to reach the airmass necessary to inflict further damage.  We have already witnessed one of the most impactful cold seasons in modern times across the Brazilian coffee belt.  Since coffee farmers began the practice of moving their coffee plantations out of Parana into Minas Gerais (also due to frost damage), we have not seen a year with 3 separate and distinct frost events…until July 2021.  We haven’t seen a level of damage like this since the black frosts of 1994.   By any measure this past July was one for the record books and one that will live long in the memory of any person involved in this industry.

The focus in Brazil will now shift to the potential onset of the rainy season given the massive importance it has to crop potential for the upcoming 22/23 crop.  We are not quite at the climatological normal period for the onset of these critical rains yet.  There are a couple of chances at some showers in Parana and perhaps a few scatters in eastern SP and MG as well late next week, though the coverage and volumes at this stage do not look overly concerning or heavy.  Brazil is still several weeks away from the true start of the rainy season and the rains that will initiate the main flowering and fixation period.

Odds of returning to a La Nina for the end of the year have increased over the past several weeks and it is our view that weather patterns will have a La Nina influence for the Q4 period and into early 2022.  While the strength and duration of this potential Nina is still a bit of a question, what we would expect to see is another year of unusually heavy rainfall across portions of Indonesia.  With the confirmation of a negative Indian Ocean Dipole pattern in place and the threat looming of another Nina, we are already seeing signs of that wetness in the pattern today.  Moderate to heavy rain will be returning to portions of South Sumatra well in excess of what we’d typically see for mid-late August.  Should this Nina form, we would also again have to monitor Colombia for the early portions of next year for excess rainfall during key flowering periods, as well as perhaps another delayed end to the rainy season across Vietnam hampering early harvest efforts.  We can also see dryness take hold in East Africa in these -IOD/Nina years, and this is another area to monitor moving forward.

It is also probably a good time to remind all that we are beginning the typical busy period for the Atlantic hurricane season.  While the frost season is over in Brazil, the weather will still have a lot to say about global balance sheets moving forward.