July 23, 2024

Commodity Insight: An astute gauge of human behavior

The late May to late June period this year was the driest and warmest in history for the United States. It was far worse than what was experienced in 2012, when grain prices rose sharply during the growing season.

The rule of thumb for the grain markets is clear — a corn crop is made or broken in July, a soybean crop in August. And now with July at hand and August just around the corner, all eyes are focused on the weather in the U.S. Grain Belt.

The problem about the weather at any time of the year is best summed up by American writer Mark Twain.

Among the many clever stories and quotes attributed to Twain is this one, a favorite: “Everybody talks about the weather, but nobody does anything about it.” This week I will write ad nauseam about the weather, but do nothing about it.

Going into the heart of the growing season for North America, July and August, the weather was so warm and dry, crop conditions for the U.S. corn and soybean crops were rated as quite poor.

From Reuters on June 6: “‘Dryness in the U.S. is lifting corn and soybean prices, even though it is bit early as the crop has just been planted,’ a Singapore-based trader said. ‘The market is building some weather premium.’”

From Reuters on July 5: “Ratings for both crops have been declining for several weeks due to an expanding Midwest drought.”

In early July, 67% of the corn crop was pegged to be in a drought. Plus, there are signs the drought areas are expanding.

From Bloomberg dated July 6: “Midwest drought eases its grip on some corn-growing areas.” But the same article goes on to state: “Midwest drought footprint shrank for the first time since May. Danger still lurks through July and August if heat comes north.”

But then this headline hit the wires and it was touted loudly. From CNBC: “‘We are in uncharted territory’: World records hottest day ever for the third time in just four days.”

“The extraordinary feat comes shortly after the European Union’s climate change service confirmed the planet observed its hottest June on record, with unprecedented sea surface temperatures and record low Antarctic sea ice. Climate scientists are deeply concerned,” the article stated.

And the day after that article hit the wires, these two headlines caught my attention:

• The Economist — “Global temperatures have broken records three times in a week.”

• CNN — “This week’s record-breaking global temperatures are likely highest in ‘at least 100,000 years.’”

And this sentence from CNN jumped off the page: “July is typically the planet’s hottest month, but temperatures are already in overdrive because of the combination of El Niño — a natural climate phenomenon in the Pacific Ocean — and the human-caused climate crisis, which is driving global temperatures steadily higher.”

The following headlines were posted on various news sites the very next day:

• “Developing: Phoenix heatwave longest ever.”

• “Florida ocean temps soar to shocking levels.”

• “Canada sees its farthest-north 100-degree temperature as wildfires rage.”

• “Historic and deadly Northeast floods trap residents, destroy roads.”

• “Japan: Record-breaking rains hit Kyushu, multiple dead amid flash flooding and landslides.”

• “Catastrophic flooding swamped Vermont’s capital as intense storms forced evacuations and closures in Northeast.”

• “Last week was the hottest ever recorded — here’s why we keep smashing records: El Niño and climate change are behind the unprecedented temperatures.”

• “Expanding heat wave prompts alerts for 115 million people.”

With the headline, “A new dangerous long-lasting heat wave could set dozens of heat records, even in notoriously hot places,” from CNN: “’Earth is screaming at us right now and people need to listen,’ Chief Meteorologist and Director of Climate Matters, Bernadette Woods Placky told me. ‘It should be a wake-up call or an urgency to people that this is just not normal.’

“Placky said we are pushing our planet to the brink with so many record-breaking days and highs higher than we’ve ever seen before, and that we are entering uncharted territory globally.

“‘It puts us in a whole new climate zone,’ Placky explained. ‘It pushes our heat even higher and extends it for longer. And that plays out in a lot of different ways that dramatically affects human health.’”

All these news headlines regarding the weather were seen this week. I cannot recall so much news coverage about the weather from one end of the globe to the other in just a week.

The most amazing thing of all is that everyone is talking and reading about the weather but no one, not a single person, does anything about it.

And that is exactly why Twain, considered America’s greatest writer, is an astute gauge of human behavior.