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“Why a stronger dollar, Plains drought ending, and important moisture coming to Russia, broke wheat prices”

by Jim Roemer - Meteorologist - Commodity Trading Advisor - Principal, Best Weather Inc. & Climate Predict - Publisher, Weather Wealth Newsletter 

• Tuesday Grain Report - November 12, 2024

U.S. Dollar strength is a huge fundamental component. We also have the rains that are easing the drought for wheat from Nebraska to Texas. In addition, my ClimatePredict program suggests improving weather for parts of Ukraine and Russian wheat. The AO index is another key factor for Russian wheat deeper in November.

The AO going slightly negative is negatively correlated with rainfall (a negative of a negative = positive rainfall for Russian/Ukraine wheat).

Rainfall was 3-5″ for Plains wheat easing the drought. If La Niña does not form, this would be bearish longer term, most likely.

Climate Predict (my in-house software) helped me forecast the bear market last summer in corn and soybeans, as well as the drought easing for Northern Brazil’s soybeans, coffee, and sugar. Notice how it is predicting much more important rains/snows for key Russian and Ukrainian wheat areas as we head into late November.

The negative AO index is creating short-covering in natural gas on some ideas of a return to colder late November weather in Europe and the U.S. However, for the U.S. any cold snap will likely be very short-lived, so the rally in natural gas is only “psychology” in a market with a big net short position.

As our Weather Spider shows below we became bearish wheat (especially KC July) on our forecast three weeks ago of the drought-breaking in the Plains and that rains will eventually settle in across Russia due to a negative AO index. The stronger dollar is also creating headwinds in this market.

While it is a long growing season, without a full-fledged La Niña event, I am suspect of any major longer term-rally in wheat.

Our WeatherWealth newsletter has suggested that wheat farmers should hedge some of their 2025 production months ago. Feel free to request a 2-week free trial and see our long-range weather forecast and trading ideas for many agricultural commodity markets. Our Weather Spider is one of the products you will also receive.

https://www.bestweatherinc.com/membership-sign-up/

Thanks for your interest in commodity weather!

Jim Roemer, Scott Mathews, and The Weather Wealth Team 

Mr. Roemer owns Best Weather Inc., offering weather-related blogs for commodity traders and farmers. He also is a co-founder of Climate Predict, a detailed long-range global weather forecast tool. As one of the first meteorologists to become an NFA registered Commodity Trading Advisor, he has worked with major hedge funds, Midwest farmers, and individual traders for over 35 years. With a special emphasis on interpreting market psychology, coupled with his short and long-term trend forecasting in grains, softs, and the energy markets, he established a unique standing among advisors in the commodity risk management industry.

     www.bestweatherinc.com