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Trade War Concerns, La Nina, Solar Cycles And Commodities

James Roemer profile picture
James Roemer


  • Cocoa prices finally react to improved west African rainfall.
  • Grain prices to remain volatile due to a host of weather and trade war concerns.
  • Solar cycles and Plains wheat drought relationships.

Trade War concerns vs. Argentina and Plains drought

While fears of a Trade War with China have had a negative impact on the stock market, along with fears of rising interest rates, a Trump Administration that is completely clueless in my opinion, and a soaring budget deficit, commodities from steel to hogs, cattle, and soybeans have also experienced setbacks. Weather, at times, has taken a back seat to these "trade concerns", but there is a lot of weather to talk about. The Argentina drought created a mid-winter spike in soybean prices (NYSEARCA:SOYB) while renewed fears over the worst Plains wheat drought in decades has caused a spike in wheat prices (NYSEARCA:WEAT) again today.

Probably, one of the top weather markets (which is a bit unorthodox and unknown to most traders) has been in the cattle market. The drought in the Plains is adding to the bearish tone in livestock due to liquidation of beef herds but could have a positive effect a year or so down the road on prices. Why? For more information, please go here.

Cotton prices (NYSEARCA:BAL) that have had a boost due to an increase in global demand will pay close attention to the Texas drought in another few weeks or so.

Cocoa futures (NYSEARCA:NIB) had been the biggest winner of 2018 in commodities, up nearly 40% on worries about hot weather a few months ago. More importantly, improved global demand and hedgers caught short during the onset of the big global crop a few months ago was behind much of this bull move. However, ideal weather this spring may have put a top in the market, at least for now. See here for more information about what is driving cocoa prices? What happens around the Indian Ocean this summer and with the timing of

This article was written by

James Roemer profile picture
Jim Roemer owns the site (www.bestweatherinc.com) offering FREE and SUBSCRIPTION BASED weather-related blogs for commodity traders and farmers. He also is co-founder of CLIMATE PREDICT, the most detailed and accurate long-range global weather forecast tool. He was one of the first meteorologists ever to become an NFA registered Commodity Trading Advisor and has worked with major hedge funds, Midwest farmers and traders for over 30 years. His unique ability to forecast both short and longer range weather trends, with a special emphasis on interpreting market psychology and major market moves in grains, softs, and the energy markets, has made him a global industry leader in the commodity risk management industry.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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