(ZSX24) (ZSF25) (SOYB) (ZCZ24) (CORN) (TAGS) (DBA) 

“Weather factors affecting grain prices. Is there any chance for a bull market?”
by Jim Roemer - Meteorologist - Commodity Trading Advisor - Principal, Best Weather Inc. & Climate Predict - Publisher, Weather Wealth Newsletter 

• Midday Report - October 22, 2024

A warm October, rapid Midwest harvesting pace of a record corn and soybean crop, and my prediction a month ago for drought-easing rains in Brazil helped to break the grain market sharply in the past week or so. 

Dry Midwestern weather (red), the stronger U.S. dollar plus drought-breaking in Brazil helped soybeans go into another tail-spin in the last two weeks

As I had mentioned with corn around $4.30 and soybeans at $10.50 again in early October, “While seasonal factors usually result in higher prices this time of the year (+3 bullish on our Weather Spider), a stronger dollar, poor Chinese demand and these maps below should prevent any new bull run in corn and soybean prices.” 

Nevertheless, a seasonal post-harvest (U.S.) rally in corn and soybeans is still possible, but any longer-term bull market would happen only if: 

A) The December-February weather turns hotter and drier in South America; 

B) La Niña was to strengthen and the Midwest experiences crop problems next summer. Right now, La Niña is very weak

A wetter pattern by early November for Plains wheat and the end of the Midwest corn/soybean harvest

We will begin to see a wetter weather pattern in parts of the western Midwest next week and/or in early November. However, with 81% of the U.S. soybean harvest complete and 65% in corn, this may not be enough rain to warrant any major rally in corn and soybeans. It would have to come from the demand side of the equation after harvest or South American weather problems.

While the wheat market rallied two weeks ago on poor planting in western Russia and Ukraine due to dry weather, big-time rains in Australia last week and rapid U.S. planting have pressured wheat prices again. The stronger U.S. dollar and these important Plains rains in about 10 days also created this top in wheat prices, for now.

The Easing of the drought in South America

So what about Brazil's drought? Is there any chance for a reduction in South American crops?

Our September forecast (below) from our in-house weather program www.climatepredict.com predicted a breakdown in Brazil's drought during October. This was based on our research that: 

A) La Niña would still be slow to form and more neutral; 

B) A negative AAO index over Antarctica (warm block) that would send cool fronts north (remember in the Southern Hemisphere fronts move north)

Is there any chance that the key pollination time for South American corn or pod setting stage for soybeans could be met with heat and dryness and a new bull market in grains? How does one hedge their crop for 2025 and what potential futures, ETF, or option strategies should a trader employ?  Sign up here for a 2-week free trial to WeatherWealth or download an old free issue.

https://www.bestweatherinc.com/new-membership-options/

Thanks for your interest in commodity weather!

Jim Roemer, Scott Mathews, and The Weather Wealth Team 

Mr. Roemer owns Best Weather Inc., offering weather-related blogs for commodity traders and farmers. He also is a co-founder of Climate Predict, a detailed long-range global weather forecast tool. As one of the first meteorologists to become an NFA registered Commodity Trading Advisor, he has worked with major hedge funds, Midwest farmers, and individual traders for over 35 years. With a special emphasis on interpreting market psychology, coupled with his short and long-term trend forecasting in grains, softs, and the energy markets, he established a unique standing among advisors in the commodity risk management industry.