Jim Roemer

Extreme heat in much of the deep south and west is beginning to create a new bull market in natural gas, but what about corn and soybeans?  Right now, my biggest concern is for flooding in the NW corn belt that may mean a switch from some corn to soybean acreage. The potential also exists for some heat heading into July.

Back in April, our forecast for drought-easing Midwest rains, combined with terrible demand, helped pressure grains sharply. This collapse may be surprising in the face of lower and lower Russian wheat crop yields and damaged South American corn and soybean production. However, it will take consistent heat and dryness later to foster a new bull market in corn and soybeans.

Could this happen? Perhaps. In my view, occasional weak El Niño conditions are holding on. I predict a hot July for parts of the Midwest corn belt based on what I’m seeing about the global climate, as per the maps below.   The key factors are record flood levels coming to Florida combined with a warm signal from a  NINO4 and a negative PDO.

1) Solar Activity:

My point of view :  T h e r e    is    z e r o    c o r r e l a t i o n     b e t w e e n    s u n s p o t    c y c l e s    a n d     gl o b a l    w e a t h e r. 

Perhaps, 50-100 years ago that might have been the case… but not today, with record global ocean warming brought on by man-made influences. Do you think that all of these record-warm years are cyclical and due to the sun? Guess again… NO!  The chart below shows how the planet has warmed since the 1880s whether solar activity (yellow line) was high or low.

2) Similar teleconnections and a look at July rainfall trends

The negative PDO in the Pacific, along with warming and an El Niño signal east of Australia (NINO4 region), combined with cooling near Peru (La Niña signal) has only happened simultaneously in two years since 1950. Depending on how these teleconnections fluctuate in the next few weeks, may result in a dry July in parts of the corn belt and take the bearishness out of the grain market.

 3) Signs El Niño/La Niña conditions are going back and forth

Volatile global weather patterns have  N O T H I N G  to do with solar cycles but everything to do with record-warm global oceans and the oscillation of El Niño/La Niña among other teleconnections.

My program is available for all WeatherWealth subscribers. The purpose is to apply weather forecasts to predictions about market trends for agricultural and energy commodities.

Shown below are the incredible rains that hit Florida: more typical of El Niño lingering than La Niña

Will we enter a new bull market in corn and soybeans? For natural gas, we became bullish last week. Please feel free to download a recent complimentary sample issue of our newsletter here, or join farmers and traders around the world who want a much better edge trading commodities on the weather, with a 2-week free trial to WeatherWealth