Commodities: The Trade of the Summer

Corn, Sugar, Drought, Weather, Silver, Gold, Soybeans, Wheat...

I mentioned earlier this year that the summer could be challenging for farmers. Here we are. Multiple weather cycles running in to each other and all of them are converging.

Conversation about the weather is the last refuge of the unimaginative.

Oscar Wilde

Brazil's historic drought is severely affecting the center-south sugarcane-growing regions, leading to significant concerns about the upcoming sugar harvest. The lack of rain has left fields parched, and the sugarcane crop, which relies heavily on adequate moisture, is expected to suffer, potentially impacting global sugar supplies.

In the US, the weather prospects for July indicate a worsening of flooding over the next ten days, followed by a return of heat and dryness. This unpredictable weather pattern is expected to cause further disruptions in agricultural areas, complicating crop management and potentially affecting yields.

The ongoing historic drought in Russia and Ukraine continues to devastate grain production, with wheat and corn yields plummeting to fresh six-year lows. This prolonged dry spell is not only impacting local economies but also straining global grain markets, which depend heavily on these key producers.