The grain market has been influenced by a variety of factors in the last few months ranging from previous China Covid lockdowns (bearish), poor demand for corn and wheat (bearish), big Australian wheat crops hitting the market (bearish), a potential huge Brazilian soybean and corn crop (bearish) vs the expanding Argentina La Nina type drought (potentially bullish later).


Corn pollination begins in Argentina in the next few weeks and there is little hope of any major relief. I think the Argentina corn crop will eventually fall below 50 MMT.


Till now, corn and wheat traders have basically “yawned” at the expanding Plains drought for wheat (the worst early planted crop in about 20 years from Kansas to Texas) and the drought in Argentina. Why? A couple of reasons 1) The demand side of the equation has been poor; 2) Wheat has 9 lives and commercial grain companies will not panic unless La Nina continues next spring and timely rains do not fall in the important April-May time period. 


The one big winner in the grain sector lately has been soybeans. Look at the seasonal of long soybean meal in December that has worked in 13 of the last 15 years and how prices previously skyrocketed.

Source: Moore Financial Research

Source: Stormvista models and Weather Bell

With respect to the corn market, again, I expect that prices may bottom soon due to this extreme heat, and La Nina is still alive and well.


But what about next spring and summer? In 75% of the cases since 1950 when La Nina eased and transitioned to a neutral climatic shift, corn and soybean crops were above trend-line. This would be a long-term bearish signal later next year, in which a 15-30% drop in grain prices would occur from whatever highs we make this winter.

Our Weather Wealth newsletter has helped farmers and commodity traders in more than 15 countries make much more informed hedging and investment decisions based on our long-range weather forecasts and 35+ years of analyzing markets. There is so much FREE information out there, much of it old news and inaccurate. We pride ourselves in 2nd guessing forecasting models and understanding market psychology. We also have a unique Best Weather spider that we publish twice a week for multiple markets. Here is an example of how we were slightly bullish on soybeans close to a month ago.

 But will our trade sentiment change in the weeks to come and how does one use ETF, futures, and options strategies to take advantage of our information from natural gas to grains, coffee, and much more? If you have not had a FREE TRIAL to Weather Wealth already, here is your chance https://www.bestweatherinc.com/membership-sign-up/


You can also follow our actual trades and track record and replicate our trade ideas here   https://weatherwealthtrading.com/home-2/a/668By registering, you will also be able to receive several complimentary issues of our monthly Climatelligence newsletters. Enjoy