I mentioned that my next update would come later Monday night or Tuesday. However, I just wanted to alert everyone about my advice last Wednesday and Thursday. Regarding my much hotter and drier outlook for Plains wheat areas again, please note, also, my “heads up” that both the Indian and European wheat crops are now under stress.
This should cause a potential additional explosion in wheat prices. Climate Predict, our proprietary analytic forecast program, suggests the potential for a hot late spring and summer for both U.S. grain areas and for natural gas. The problem with natural gas is the very high prices and any ending in the Russian war on Ukraine could send prices tanking.
Warm And Dry May Weather Is Hurting U.S/Europe/India Wheat Crops But Good For U.S. Corn Planting
The drought in southern Brazil may help old crop July corn gain against new crop December corn. A lot depends on the outside markets with the fear of a stronger dollar due to rising interest rates.
Climate Predict: The Outlook For May And Early Summer
Pacific Ocean temps above (We are in the phase to the right, a negative (cool PDO). See the definition, below. Based on a stronger La Nina (contrary to other scientists and analysts who said it would die), combined with a negative PDO index and a positive AO index over the Arctic, yields the potential weather pattern (see Climate Predict – below). There are some major La Nina warnings out there, but for the most part we have a moderate (not severe) La Nina.
May Temperature and Rainfall Trends
While the Indian wheat crop has been hurt by big late-season heat, sugar, and cotton crops are more dependent on summer Monsoon rainfall. La Nina and the above-mentioned teleconnections portend a potential big India and Thailand sugar crop. Hence, unless crude oil soars further and/or Brazil has a drought, weather may NOT be bullish for sugar prices this summer.
In the meantime, it is Plains wheat that is the most bullish agricultural commodity market. The Indian and European wheat crops are suffering too!
June and July Temperature Trends
A month or so ago I suggested that summer may be cool. I began adjusting that forecast in the middle of last week. While “not written in stone” – here are potential temperature outlooks based on the above-mentioned teleconnections and climate change: If this forecast is correct, it would be:
A) Bullish natural gas, especially with a potential active hurricane season the drought out west hurting hydro.
B) Possibly bullish corn and soybeans again (later), but right now, warm, dry Midwest weather is most bullish for wheat, (not for corn).
Article by Jim Roemer
About the Author
Jim Roemer is a registered Commodities Trading Adviser who has 38 years of experience as a meteorologist. He runs the meteorology and commodity analysis company, Best Weather, Inc.