El Nino Drought in South Africa Bringing Record Grain Imports

Grain markets are reacting to one the worst droughts on record in South Africa causing a reported 25% slump in corn and wheat grain output this year. Grain futures – both corn & wheat – are both trading down today at the Chicago Board of Trade.

The USDA bureau in the northern part of the country has now determined a 3.0M ton estimate for the country’s corn import for the year starting in May – twice the amount of a prior estimation. For wheat, a record 2.0M ton amount of wheat is said to be imported for the same year.

Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, shared her fundamental view of the grain futures market by stating,What is happening at the southern tip around the other side of the world is proof of El Nino’s global outreach.” Bourbeau added,Here in the Northern Hemisphere we are seeing much wet weather, however on the opposite side of the globe the hot and dry conditions are making crop prospects very much unfavorable.”

Corn and wheat futures trends may be technically “up” at this time, but sideways would be a more accurate way to look at their daily trend. If other places in the Southern Hemisphere are experiencing similar hot & dry weather, then many countries may be doing their grain futures market shopping right here in the USA – we have plenty to provide.

ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.