USDA & GFS Weather Model Delusional! June weather worse than 2012
Jun 21, 2016
This blog is for the thousands of farmers in panic mode because the USDA is completely delusional on the health of the corn crop sending prices in a tail spin.
First...STAY CALM...never do anything in a panic and don't sell the farm...prices will soar in the weeks ahead.
Second - the US GFS short range model has way over forecast cool and wet all June long and we're ending up with the hottest June in 22 years across the Corn Belt and rainfall 51% below average for the first 3 weeks so PLEASE DON'T BITE ON THE COLDER/WETTER PATTERN - very unlikely - and the Euro model agrees.
Third - we bought MORE Sept and Dec call options as there is little doubt we're headed for a scorching hot/dry Summer.
Let's go back to this date in 2012...the weather pattern is eerily similar as is the USDA's nonsense. At this point in the 2012 season all was good per USDA despitea hot/dry June and Corn prices were down 14% year-to-date as of middle June 2012. Here we go again!!!! Then we had the hottest/driest July in decades...wt360 projects the 2nd hottest/driest only to 2012 so hang in there...the rally will almost certainly explode in July! LARGER CHART VIEW
So let's look at the weather trends this June and see how they compare to 2012...in many areas similar if not worse.
Let's start with Corn County USA around Des Moines, Iowa. Year-to-date rainfall in Des Moines is MUCH DRIER THAN 2012! This tells us something about the Summer pattern ahead. A couple more heat-waves, they will happen, and we'll have a major problem during pollination....just like Brazil did this year. Recall Brazil had great warm/wet March and everyone thought life was good. Then they had 3 weeks of hot/dry weather during pollination and now their yields are off 15%...this is coming to the U.S. Corn Belt as we expect yields off 13% from last year. LARGER CHART VIEW
How about Des Moines conditions here in June - WORSE THAN 2012! Hottest in 121 years (max temps) and 3rd driest in 25 years. LARGER CHART VIEW
How about Omaha, Nebraska - even worse...much worse than 2012 here in June. Hottest on record with nearly half inch of rain. Didn't NOAA say it would be cold out here in June??? So why so much faith in the USDA...another government agency that appears completely clueless as to what clearly is the start of a drought and hot/dry Summer. LARGER CHART VIEW
How about the biggest corn county in Central Illinois around Peoria and Bloomington. Hottest on record and driest in 21 years. This is damaging the health of this crop weeks before we go into pollination. LARGER CHART VIEW
For the Corn Belt overall it's better in spots but overall not a good June weather-wise. Hottest in 22 years, 51% below average rainfall that is NEARLY IDENTICAL TO 2012 and MORE HOT DAYS over 90F than 2012 - most in 22 years! CLICK FOR LARGER VIEW
June Our year-ahead forecast has been trending well for Corn Belt temps and rainfall. What the USDA and NOAA cannot see is that we are not headed for a repeat of the past couple years that brought cold/wet Summers but rather a scorching hot/dry one. Precipitation accuracy and year-ahead outlook for the Corn Belt. CLICK FOR LARGER CHART
Temperature accuracy and year-ahead outlook for the Corn Belt. CLICK FOR LARGER CHART VIEW
So, I know this is a tough day but history does repeat itself and we have every expectation that this time in July we'll see soaring prices with almost certainty. We are heavily invested in Sept, Dec call options and Jan Corn ETFs. Hang in there folks! We predicted 2012 while most thought all was good...as the stock chart above top shows - things can and will change at warp speed.
I apologize for being radio silent but speaking to hundreds of farmers again tonight.
God Bless the Farmer!!! - Capt Kirk out.