2022 'Explosive cyclogenesis' storm has hit America. Wheat futures have gone bid. Prices may spike if the storm and severe weather continues into January 2023

 

The image above is of the cyclonic 'bomb' storm which is descending onto the East Coast of America and will effect 60% of Americans travelling (or not) throughout the Christmas break.   A bomb cyclone is a weather front that has a significant drop in air pressure within its eye, which in turn leads to a formation of an unusual weather pattern that includes extremely low temperatures, gale force winds, snow and rain.

(Chart 1)

This superstorm may turn out to equal or become worst than the 2016 cyclone that battered America in January 2016.      On news of wheat and meat supplies to be severally affected by the storm.  As noted with the Wheat futures (Chart 1), future contracts are now trading at 7.7 ($ bushel), above the 7.4 price support and between March and June's 2022 highs of 9.8.  With inflationary conditions still supportive of food stocks/commodities, the wheat price is still holding above its five year high.   We may see bids take the price closer to its October 2022 highs when Russia began large scale missile attacks on Ukrainian infrastructure.