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CORN/SOYBEAN WEATHER UPDATE
corn should collapse over the next 2 weeks
I see no change in the generally good weather for corn and soybean
crops into mid-month. Some talk about a hot-dry ridge right now
in the corn belt mid-month we are fading with -AO and neutral to -NAO
index. I do not think it will be a market factor but still needs to be
looked into (The wet planting weather in June for soybeans
in Heilojang as well as the cool weather that slowed corn growth
in Jilin). Weather in U.S. is generally bearish, no change, especially
corn with soybeans tied partly to outside markets
Though some models try to build a corn belt ridge the strong -AO
should help squelch it with cool eastern Midwest to Northeast
weather mid-July.
ENERGY
Take a look at the AO index for the month of June and how
negative she was. One key reason, along with -NAO for the cool
eastern weather. Still can’t see anything to get excited about
from a weather perspective to natural gas, but if there is a
surprise today in EIA (not saying it will be or not), it may be
friendly, but obviously will not change longer term big supply
situation.
COFFEE
Interesting to see how the AAO index over the
South Pole was one of the most negative in recent memory,
too, but this DOES NOT always translate into colder weather
for Brazil coffee, such as this year. This will have to be
watched for a couple cold snaps entering Argentina in
mid-late July, but right now I don’t see a frost, but it
may turn cooler the second half of the month and may possibly
over some incentive for coffee to rally
WHEAT
Harvest will be slowed later this weekend in Kansas to
Illinois and Missouri from wet weather, but not sure
if a market factor, though see seasonal about going
long wheat against corn. Weather should improve
for Plains States harvest mid week next week again with
probably not long standing wet weather harvest concerns,
though quality of soft-red crop may still go down slightly
due to scab disease from wet weather
COTTON
Up yesterday mostly on worries over India Monsoon
and lower U.S. crop ratings in the U.S. per comments
the other day. I see some improvement down the
road for U.S. crop with some rains Texas around
July 7th and possibly the dry southern Delta regions.
However, yields may still be below trendline this year
due to South Texas drought and more rains will be
needed again in South Delta. Central China regions
around Shangdon have been dry and need to be looked into.
Indian Monsoon has been slow and planting is behind.
Models have been overzealous predicting rains and
though I do expect some important rains to fall, overall
over next 2 months will call for normal to 10% below normal
trendline yields for cotton,
Cotton is a crazy market as you know. It is possible, once
rains begin to increase over the next week in a few
cotton growing areas of India, and if the southern Delta
gets rain in about a week, that cotton could sell off again.
This market has many factors, though part of it has been weather.
Overall, difficult to get longer term perspective in this market
due to demand side of equation. Weather has been supportive
as commented last few weeks, a bit unsure longer term, but
will again still call for normal to below trendline yields China
and the U.S. as well, though not a disaster
Roemer
