Many commodities from gold to sugar and now the grain market, have been whip-sawing around due to a combination of Trade Tariff concerns; the weaker Brazilian Real; and most recently, changeable global weather for at least 5 commodities. Some of the most trending agricultural commodities the last few months have been in cotton, coffee, corn, sugar and soybeans (bearish) brought on also by mostly benign global weather and big crops. Most recently, natural gas prices (more bullish) have broken through key resistance. This is due to U.S. natural gas stocks the lowest in more than 10 years.
Below we talk briefly about the influence the Brazil Real has had on coffee prices, plus why wet Midwest weather has formed a bottom in corn prices for now, and what natural gas traders are looking at, with regard to potential cold weather in the northern U.S. and big heat in the south that has also helped to inspire a rally in natural gas.
The International Coffee and Cocoa Organization has continued to raise the 2018-2019 Brazil crop. While the commitment of traders is heavily short coffee futures, this is one of the few times in recent years, that a heavy short spec position in a commodity continues to make money.
I look for the next El Nino, if we even have one, to be quite weak. Is there potential for weather problems this winter (South American summer) for coffee? What is my longer term outlook for prices and will I recommend a potential buy in this market, soon? If you subscribe to our CLIMATELLIGENCE newsletter,you will get up to date weekly weather and crop ideas, not furnished by the majority of weather forecast firms out there. Try a FREE SAMPLE here
CORN BELT WEATHER TURNING WET FOR PRE-HARVEST PROBLEMS, WHILE PLAINS DROUGHT ENDS WITH NEAR HISTORICAL FLOODING–
Our last issue of our Climatelligence Weekly Newsletter, began discussing a week ago my concerns about flooding for parts of the Midwest grain belt. You can see on the graphic below, that rainfall In parts of Iowa, South Dakota and Minnesota has been running more than 200-300% of normal. This, combined with cool Midwest weather has created “some concern” about the early corn harvest in the NW corn belt. How serious will this situation be? Is the recent small rally in corn only a “psychological affair?”
If you are trading grains, yes, there is a ton of free information available all throughout the web and from various services. But few of them have 35 years experience analyzing the affect weather has on the grain market. You will want to stay informed with the very best updates and market ideas by subscribing to our service. For another few weeks, are are offering a 25% discount from the standard $1200/annual fee for 42 issues.
Midwest Soil moisture (above) turning very wet that has caused a bottom in the corn market, for now. In contrast, the drought in Texas has been relieved, but with flooding rains. See an video here.
NATURAL GAS PRICES RALLYING ON LOWEST U.S. STOCKS IN 10 YEARS AND PSYCHOLOGY OF POTENTIAL COLD WEATHER–
Natural gas stocks are the lowest in 10 years, creating a psychological rally in prices, on a “what if” scenario of a possible cold winter. A block over Alaska is forecasted to bring down some unusually cool air into the heart of the nation’s Midwest natural gas areas. Typically, warm October weather, nationally, “lowers” natural gas demand. However, colder Midwest/Eastern October weather increases heating degree demand. The combination of hot weather forecasted for the southeast and cold weather over the north in late September and early October has helped natural gas prices rally to their highest levels in weeks. Will this continue and what is our longer term winter view? Once again, you can try a sample of our newsletter or subscribe for the very best information.