The rain gods have not been very soft on us this year. Now is the time that we can say that the rains are deficient. If by end of this week we are not receiving some good rains then the only rains that we will be experiencing now is the withdrawal rains in September. The effects of these can be already seen in the prices of the crops. I had some researcher from South Korea who sent me the report regarding the rains being less in India this year. They have been saying that India has problem and the clouds are not entering the landmass. Most of the pressure is being directed towards china as they are facing the trouble of typhoons. It is clearly evident that the pressure zones have shifted towards china and there is a possibility they may be facing some floods. The government had tried its hands with cloud seeding over Madhya Pradesh and Maharashtra but they did not help much. But such is the dilemma of our system if a permission of cloud seeding has be obtained then the process takes 1 month of total approval from all the authorities. One thing is for sure that the government was very late in taking the decision on cloud seeding program, or by now we would have not faced the situation that we have been facing now of no rains.
Cloud seeding is a procedure where in a chemical silver iodide is released in the environment which will make the clouds rain. When we had sufficient amount of clouds the MET department did not take any action and waited for the natural action of rains to take place. It simply does not make any sense now because cloud seeding works only when we have clouds over our heads. Without clouds even cloud seeding does not work. It is really a very sad situation where our own weather experts have to subscribe to international agencies to predict our rains where it is so well known that India as a country is highly dependant on rains.
The worst affects can already be seen in Gujarat, Rajasthan, Uttar Pradesh, Madhya Pradesh, Haryana, Punjab and most of the northern parts of our country. Maharashtra has been a bit lucky along with the southern states that have received the initial rains. The commodity prices have already been sky rocketing with no end in sight. Now the biggest problem that the commodity prices are facing is that most of the commodities have reached their all time peaks and now the markets are in a wait and watch situation as where will the prices head now. The skepticism can be clearly seen as the prices hit the upper circuit and the very next day lower circuits as the speculators are scared to hold any long term positions. They simply do not wish to carry their positions overnight.
The weather conditions that we are having now can turn directions for various commodities.Commodities that will take their direction up due to deficient rains:
Guarseed
Guargum
Sugar
Castor
Wheat
Rice
Commodities that will take their direction on the downside due to high prices and lack of demand, as they are very much driven by consumption and these commodities do not perform well as they are not considered essential for survival. A cut in consumption in these commodities does not pinch a lot.
Crude oil
Gold (if the farmers do not make money they wont have money to buy gold as gold is the only investment they believe in)
Silver
Spices
Now as far as trading is concerned I have been very cautious with certain commodities as I had mentioned earlier that the rains by the mid of august will help me analyze which commodities to trade. Now I am very much clear in my research and I am ready to trade. I urge my readers to make sure that even if you feel bullish or bearish of any commodity make sure that you trade in small quantities because I still would like to warn you that the volatility will not end till the end of September. Wishing you happy trading and a profitable week.
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