A few weeks ago, we alerted clients to our personal sentiment that higher U.S. interest rates, Trade Tariffs and other factors could result in concerns about a global economic slowdown and recessionary pressures. Copper’s price behavior is often a good gauge as a precursor of the economy’s trend. The recent demise in copper prices could spell trouble ahead.

Presently, where are there major weather concerns for commodities? Recent dryness has eased in Brazil (as predicted) helping, at least, to send coffee prices temporarily tumbling again. For corn and soybeans, the odds are low for any significant supply disruption to arise in South America in the coming months. However, Brazil and Argentina have a long growing season; things can “change on a dime.” To keep abreast of the very best and latest commodity weather information, and to learn how to trade markets ranging from coffee and soybeans to cotton and natural gas, you can find out more info here.

Current weather issues are not being looked at by traders and hedgers because of worries over global demand, but here is just a partial list of situations that need watching:

1- Potential lower cotton crop yield in U.S. (too wet Texas/Southeast) and in India (poor end to the monsoon). All eyes will be on Australia’s current lower acreage potential due to their recent drought;

 

2 – Lower sugar production in Brazil from switching to more ethanol production and wet weather that may impede the harvest;

3 – Dryness in Ukraine and Eastern Europe that is threatening early wheat planting;

4 – Wet weather in Texas and Kansas that has caused some early disease concerns and worries over slightly lower acreage.

The first U.S. wheat crop condition is below the 10 year average due to wet weather. If global weather concerns remain into next spring, then it is possible that a bull market could resume in wheat. Will El Nino form and be strong enough to cause weather issues for crops? Find out here

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