Wild weather will cause food prices to skyrocket in 2021


As if 2020 weren’t bad enough, 2021 is likely to bring some extreme Biblical-style weather, including droughts, freezing winters and monster hurricanes, according to recent research.

While bad weather might not be something to wish for, savvy traders should be able to make money as the prices of foodstuffs such as wheat, corn and coffee jump as bad weather destroys harvests and reduced yields, reports Hackett’s report. .

The Sun and La Nina will send Weather Wild

“The main reasoning behind this bullish trend is our forecast of escalating volatility and wild weather extremes as a large La Nina aligns with the first Grand Solar Cycle minimum in over 200 years,” the Hackett report.

Solar minima are often associated with cooler weather, and large solar minima tend to be severe. A great low caused the Thames to freeze in London. With the new solar minimum, we should expect equally brutal weather.

At the same time, the La Nina weather system, which typically brings drier winds, will exacerbate discomfort and lead to droughts, the Hackett report predicts.

Drought ahead for the main food production areas

“[We have confidence there will be] major drought cycles are intensifying in the United States, Eastern Europe, South America and Western Russia, ”the report says.

In addition to the drought and harsh cold of winter, there is more bad news for farmers. The oceans are likely to start to cool after a 40-year warming period. In turn, this cooling of the oceans will cause air temperatures to drop.

Again, this will hurt crops around the world, reducing yields and pushing up the prices of grains and other agricultural products.

This could happen as early as fall 2021 and initially last until spring 2022, according to the Hackett report.

“We believe this weather event will have a much bigger impact on Ag[ricultural] supplies and prices than droughts, ”says.

Prepare for higher grain prices

Or, put it simply, a harsh winter that is longer in less than a year will cause the prices of grains and other commodities to rise.

Investors interested in profiting from the likely recovery should consider buying exchange-traded funds that specialize in holding grain futures. These include Teucrium corn (MAS), Teucrium wheat (WEAT)

, and soybean Teucrium (SOYB)

ETFs that track futures prices for corn, wheat and soybeans respectively.

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