1 AM EDT; 8 AM European time, Friday
Please spend some time this weekend and see my video. You will find it very interesting about how the weather is affecting, and will continue to affect the grain markets.
I talk about Midwest grain weather; why I was bearish corn three months ago but no longer; the weather pattern for Canadian spring wheat, oats, canola, and a lot more. This may be the first legitimate weather scare for corn and soybeans in two summers. But will it last for more than just a week? That is the key (complicated) because no La Niña. Remember, my timing was perfect on Monday, getting clients out of short corn futures and short soybean option positions.
(13 minutes) Very educational video about how I use climatological techniques to predict summer grain market weather and trading
Click on the video above
Videos coming on Monday EDT will discuss:
Why have sugar prices broken out technically, and what are the fundamental reasons? The Indian Monsoon may begin to falter again, and Trump Tariffs plus Brazil taking measures to convert more sugar into ethanol, are more bullish.
Why my Weather Spider became cautiously bearish cocoa several weeks ago, and the fundamentals that may support a longer-term bearish move. Now, the charts (for the first time in two years) became firmly bearish on Tuesday or Wednesday. Hence, the Spider is at least a minus 7 now.
After calling the 50-60 cent (20%) collapse in Arabica NY coffee prices due to a big Vietnam Robusta crop and good Brazil harvest weather, has my longer-term bearish attitude changed? Why have Arabica coffee prices bottomed for now, but Robusta coffee keeps falling sharply?
Is it just some big-time southern and Midwest heat that is driving natural gas prices into a technical bull market? After all, inventories are large. I will discuss the fundamentals that have helped prices soar over the last week.
I may have a few updated BestWeather Spiders
WEATHERWEALTH TRADE IDEAS
I advised you to take $1,500-$2,000 profits short corn on Monday. I am cautiously friendly due to a big short position and a drier, hotter pattern after a lot more rain the next week. No new advice, but I am cautiously friendly, as I mentioned, on Monday, for the first time in months.
I also suggested taking very small profits on short November soybean calls out of the money on Monday.
Buy the soybean ETF (SOY) and risk 3% the next 4-6 weeks. While certainly will not be a home run like shorting coffee call options two to three months ago, at the time, there is a 50-50 chance for an additional 50-cent to $1 rally in soybeans (5-7%).
Buy the natural gas ETF (BOIL) and risk 10%, but confidence is only moderate as some of the move up in natural gas have been built in the summer heat. Stocks are still above the 5-year average. A lot will depend on LNG exports and no weather factors, as well.
Some of you emailed me that you shorted cocoa a couple of weeks ago on my cautiously bearish Spider, along with my comments about using technical analysis. I would maintain a longer-term short position. If you did not sell cocoa, wait for now.
I was interviewed by The Wall Street Journal on Monday about my view on cocoa and being bearish in the long term. See this link here
While coffee prices have bottomed and we advised taking big profits short call options a week or so ago, longer-term traders are long the March 2026 $3.00-$2.50 put option spread. That spread was up more than $3,000 a contract when prices dropped to about $2.80 a few weeks ago is still up $1,000 a contract.
Out of short October sugar a couple of weeks ago with at least $1,500/contract profit. You may still be long the October 17 cent put from three months ago at around 60 points. My confidence is not high at this point, being short and though the put option only costs about $600 and could be profitable later, I am unsure, and when I am unsure, that means get out!
