Answer: What you describe is a common complaint during the hot, dry summer season. The problem is leaf scorch. Leaf scorch is caused by one or several factors.
Drying wind - During periods of high, dry winds, moisture is removed from foliage faster than the roots can supply it. The result is scorched or withered foliage. Only protection from the wind can help in such cases.
High light intensity - Some plants cannot stand the bright sun of mid-summer in Orange County. This is particularly true of trees and shrubs not adapted to the local environmental conditions such as most magnolia, dogwood, azalea, and maple.
Insufficient soil moisture ? During dry seasons, watering should be very thorough. Merely sprinkling the ground around a plant until the surface is wet is inadequate.
Mulching will help slow water evaporation, but it won't protect the foliage from the sun and Santa Ana winds. Since the tree is small, you may want to think about moving it to an area where it will have at least some protection from hot afternoon sunshine. Morning sun would be fine - filtered afternoon sunshine or afternoon shade would certainly help the appearance of your magnolia tree.
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