The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Weather bulls might soon find something to cheer about... Forecaster are now thinking parts of Brazil could see anywhere from 6-12 inches of rainfall in the next 7-10 days, especially select areas of Mato Grosso and Goias (a couple of major production areas). The concern is that the extremely wet conditions will heavily weigh on the pace of the soybean harvest and could aggressively slow filed work and planting of second-crop corn. Remember, if the second-crop corn in Brazil gets in too late it runs a very good chance of missing all of the late rains, hence causing significant yield stress. the past couple of years they have been able to get the second-crop in the ground in a very timely fashion and they have had excellent late rains. This time around the crop isn't going in bear as quickly and there is some talk they may be getting all of their rainfall earlier rather than later. In fact some sources are already thinking the abnormally heavy rains could push out well beyond the 10-day forecast. I am not one to generally give the longer-term forecast much weight but this is certainly worth monitoring. Especially when you consider hot and dry conditions in select areas in Southern Brazil may have already taken a toll on yields. I should also point out that Chicago Ohare airport recently record its 22nd second day of below ZERO temps for this winter, making it the third most below zero days since the records began being kept back in 1872... My question is how can anyone argue we are not stuck in the middle of a very very volatile and extreme weather cycle? As we approach Spring planting I am thinking weather bulls will find a lot more to cheer about, certainly more than the apparent "green house bubble" many of the bears often believe the crop is planted, grown and harvested in. One thing I have learned through the years, you can be a sharp as a tack in regard to the Supply and Demand numbers and wiz with the balance sheets, but nobody... I repeat nobody, has been able to consistently out guess Mother Nature! Moral of the story, the running of the "weather bulls" might soon be around the next corner. How long they stay in the streets and how many bears they gore remains the question??? As I have been saying for weeks, be careful shorting the front-end of the soybean market its extremely enticing but remains extremely dangerous. CLICK HERE for my daily report....
No comments have been posted to this Blog Post