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| IMHO, you are right about this. However, it is easy to envision a strong El Nino by mid-summer with cooler and wetter conditions in the heart of the corn belt. This could easily make expectations of huge corn supplies by fall. By the time these weather conditions appear, the futures markets could have already anticipated them, and corn prices could really be in trouble. Will the El Nino develop as anticipated? Will cool and wetter than normal conditions develop? No one knows at this time. If markets were easy, we would all make lots of money.
Along with your thoughts about weather, I would add that in my study of Iowa tree ring data, this year and next year are the center of what should be poor growing conditions (for trees, to be correct) in Iowa. I don't know about corn, as it sure looks like what I've called the thirty year bull has occurred, but the roll adjusted contract for soymeal looks like it is on a long term exponential path to a blow- off top. This might just be the case *if* we do have a strong El Nino, as oilseed production elsewhere could be impacted significantly this year and then here the year after the El Nino.
As always, just my thoughts. FWIW. I don't know of anyone else looking for a cyclic period of poor growing conditions in the corn belt in the next 2-3 years, but I remember how strong the cycle is going back to (as I remember) 1680. I remember lots of repetitions of the cycle and that, in the absence of strong El Nino activity, the cycle is very consistent. | |
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dont look a gift horse in the mouth
