There was little change in the June WASDE Report and market experts seem to be focused on the recent weather changes. Arlen Suderman, Chief Commodities Economist for StoneX Group, says to expect a hot and dry summer.
“The general pattern that we’re in with what we call a negative pacific decadal oscillation, which means cool waters off the west coast stretching to the southwest toward Hawaii that tends to give us a higher risk of a continuing in a drought type situation. So, there will be rains in the dry areas of the Midwest, but they’re going to be more scattered in nature, it’s going to be a haves and have nots type of a thing, and the overall pattern is going to be below normal rainfall with above normal temperatures.”
Suderman says the short-term outlook shows average temperatures for the next week or so at seven to ten degrees above normal, drying out crops.
“Boy, we are zapping it fast, and I don’t think the market really recognizes that, NOAA’s Climate Prediction Center has some excellent maps that estimate water in the soils and the deficit and the deficit covers most of the Midwest right now. In the next two weeks are expected to simply add to that deficit.”