U.S Drought Lingers Into 2013, Could Pose Long-Term Challenges

Jan 18, 2013

U.S Status As Key Agriculture Region Could Be Troublesome If Drought Persists

The U.S drought that plagued much of the nation last year, is posing as a threat for 2013 as drought-like weather conditions continue. This will likely be a significant problem as the U.S is one of the key agriculture regions in the world.

In many communities in Nebraska, Kansas, Oklahoma and Texas have seen the worst. In a rural community in Wapanucka, Oklahoma they have lost water all together as the wells have run dry. Officials have since run a line to a neighbouring area for water. While in Texas, state officials are seeking a $2 billion fund in order to finance water projects – as a number of communities are facing shrinking water shortages. The news is even worse for rice farmers in the region, who were told earlier last month that there will most likely not be enough water to irrigate the fields this spring. In Kansas, state officials have enacted penalties for those who exceed water use limits.

The persistent drought is worrisome for farmers who were already hit hard, with multibillions of dollars worth of crop and livestock losses.

Video: Is China Buying US Soybeans + USDA Nov 14th Crop Report could be “Game Changing”

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12 MMT of U.S. soybean purchases by China by year-end is better than 0 but we all need to give it more time and give it a chance to unfold. China did lower the tariffs on Ag and is buying U.S. wheat and sorghum.
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U.S. government shutdown is now the longest in history at 38 days.
But despite a U.S. government shutdown we will be getting a USDA November crop report next Friday and it could be “game changing.” If the USDA provides a bullish surprise with lower U.S. corn and soybean yields and ending stocks that are lower than expected both corn and soybean futures will break out above their ceilings at $4.35/bu and $11.35/bu respectively.
The funds continued their selling in live and feeder cattle futures on continued fears that the Trump administration want to lower U.S. beef prices. The fundamentals have not changed, only market psychology has.
Stocks markets continue to worry about a weak U.S. job market, but you can blame ChatGPT for that. In the future, we will have a more efficient, productive and growing economy with a higher unemployment rate until we have more skilled AI workers.
After 34 new record highs in the S & P 500 and 124 new records in the NASDAQ in 2025 we are back to a correction and investor profit taking as AI valuations may have gotten too stretched near-term ahead of NVDA’s 3rd quarter earnings announcement on Nov. 19th. But this is not an AI bubble.
75% of Tesla shareholders approved a $1 trillion pay package for Elon Musk!
It has rained in South America in the last 7 days, but both the American and European models agree that Central Brazil remains dry in the next 14-days!

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