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Advisor

Wild weather & markets

It appears that weather will continue to be a big factor in the markets, at least from a global perspective. A new report (click here) from the World Meterological Organization predicts that the pattern of extreme weather and flooding around the globe could last for four more months, according to the Dow Jones story.  

 

By one measure, the impact of this current La Nina is ranked third-strongest for the past century.

 

Although the climate pattern is expected to weaken over the next few months, the effects are likely to continue in the world, the story said. La Nina is being linked to flooding in Australia and wetter weather in the western Pacific, wetter-than-normal conditions in southern Africa, and drought in east Africa and the western seaboard of South America.

 

Looks as if the weather will continue to bring drama to our markets, yes?

 

John

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4 Replies
Senior Contributor

Re: Wild weather & markets

The drama is certainly going to be there.

 

One area left out of the extreme weather forecasting so far is the corn belt in the U.S..  Any thoughts on this?  Can anyone remember the circumstances leading up to the last two previous drought cycles in the corn belt?

 

Perhaps the biggest story this year will come from an area people least expect.   

 

 

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Senior Contributor

Re: Wild weather & markets

right now, with all the snow, I would be more concerned with spring flooding in the corn belt, delayed planting, and the resultant yield hit of a very wet year. some of the biggest yield losses come from too much untimely rain, not summer drought. and more so now, with much improved drought resistence in the new stacked corn.

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Veteran Advisor

Re: Wild weather & markets

A drought like in 88 will test the hybrids for their real tolerance--it would be a eye opener either way

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Senior Contributor

Re: Wild weather & markets

Correct, it would be an eye opener either way.  Though my understanding of the drought tolerance components of hybrids out there, they still have a ways to go (a couple years?) until they introduce the genetics that truly exhibit drought tolerance.  But even so, a Russian style drought would dramatically reduce bushels below demand numbers and create an interesting scenario in the markets.

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