Another Wild Ride up for Grains Soon?

FORTUCAST LONG-RANGE WEATHER

We ran our weather cycles and two new cycles should create rainfall totals to be drier than normal.

The 12-year rainfall cycle is drier in 2023-24 and kicks on Feb. 24, 2023, this year. The 18.5-year cycle is hot and dry through July 2024.

The 84-year cycle is dry but the 29.5-year cycle has above-normal rainfall through 2026. California weather will be flooding the next two years but the Midwest will be in trouble.

The two-year cycle will probably prevent a major catastrophe as it is wetter than normal this year into harvest and then creates dry weather right on time.

Overall:
Expect a hot and dry summer and with late planting from cold spring temperatures, the crops will be vulnerable and have weaker yields.

We have noted that inflation cycles kick in again and will top out in April 2024 and that will help prices.

According to Farmer’s Almanac, spring will be delayed and temperatures will be slow to warm. In fact, around the time of the vernal equinox, unseasonably cold temperatures may be gripping many parts of the country, extending the “shiver and shovel” portion of our outlook. We are predicting a “soggy, shivery spring.”

Summer will be hotter and drier than normal, with the hottest periods in mid-to-late June, mid-July, and early and late August. September and October will be warm, with near-normal rainfall, on average.
( Special Thanks to Farmer’s Almanac)

Grains are deeply oversold now and cycle highs dominate into at least June. Corn and beans have already shown signs of bottoming and South American heat is a concern.

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Grains are far from Done to the Upside.

This week is a rare pullback week for grains and we should be buying Sept. call options or ETF for grains like CORN, SOYB, or WEAT into Friday.

Larger patterns still point to 1771-80 short-term on July beans and 1875 into later in the spring. Corn should hit 854 if not 884 before we worry about a pullback and July wheat is projecting 1225 and 1397 after this week’s pullback. Wild weather cycles continue this year, Ukraine and Russia produce 29% of the world’s wheat and cold and wet springs in the Midwest may force more corn into soybeans as the last safe planting date is May 10th. Fertilizer prices are through the roof and some places cost 5 times what they cost last year, and this eats into profit and we need these high prices to keep things going.

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Wheat

We would not be shocked to see May wheat still hit 1450 or 1518 later in the season if the war news goes its way and we have a bias for higher prices but trading this market requires huge pockets or buying well-priced call options or spreads on dips. Russia and Ukraine export 29% of the world’s wheat and that is a huge impact on the world.

Soybeans

LOOKING AHEAD: Wild weather patterns for the next 7 years will create prices that we have never seen before. Growing seasons will be shorter with colder and wetter spring and early frosts due to the Sunspot cycles. La Nina will come in the next few years and push prices sharply higher. This is only the beginning of a super bull and food shortages for years. Flood cycles are strong this year and will impact vulnerable growing areas.