Cotton, corn and soybean fields along with massive hog and poultry facilities lie in the projected path for Hurricane Florence.
The storm’s U.S. landfall could come Friday between Charleston, South Carolina and Norfolk, Virginia, the Hurricane Center said. As much as 15 inches (38 centimeters) of rain could flood cotton fields in parts of North Carolina, according to AccuWeather Inc. The state is also home to several pork- processing plants from major producer Smithfield Foods Inc.
Florence will likely bring “wind and flood damage” for corn and soybeans in the region, Commodity Weather Group said in a report Monday.
“Cotton is one of the largest commodities that can be affected by Florence,” Terry Reilly, senior commodity analyst for grain and oilseeds at Futures International in Chicago, said in an email. “Too much rain is never a good thing for any crop, unless it’s rice.”
This has been a very quiet hurricane season particularly compared to last year but that is about to change with Hurricane Florence due to make landfall later this week. This article from NOAA raises some important questions from what we might expect from hurricanes in future. Here is a section:
Our regional model projects that Atlantic hurricane and tropical storms are substantially reduced in number, for the average 21st century climate change projected by current models, but have higher rainfall rates, particularly near the storm center. The average intensity of the storms that do occur increases by a few percent (Figure 6), in general agreement with previous studies using other relatively high resolution models, as well as with hurricane potential intensity theory (Emanuel 1987).
This forecast is for the next century and is not immediately applicable to every hurricane but it does give us some cause for reflection when we consider the massive rain drop associated with Hurricane Harvey last year. The US east coast is potentially about to experience a similar precipitation event and that has the potential to influence commodity prices at least in the short term.
Cotton is steadying in the region of its trend mean and a sustained move below it would be required to question medium-term scope for continued upside.
Lean Hogs continues to firm from the region of its recent lows following a sharp decline from its June peak.
Meanwhile the insurance cost of hurricanes has been rising. The S&P500 Insurance index hit a medium-term peak in January and trended lower until July. It posted a relatively modest rebound and is now testing the region of the trend mean. It will need to continue to hold 380 if support building is to be given the benefit of the doubt.Back to top