Mother Nature has a weird sense of humour. She seems to favour the adage "when it rains, it pours". During the 1930s, the United States was faced with both a sovereign debt crisis that emanated from Europe and the Dust Bowl (see John Steinbeck's novel, "The Grapes of Wrath") that devastated agriculture from 1934. According to Herbert Hoover's Memoirs, the European Sovereign Debt Crisis extinguished the green shoots of recovery that had began to sprout in April of 1931 after the stock market crash of 1929.

Interestingly, capital fleeing the 1931 Sovereign Debt Crisis found cover in common stocks and commodities. Chicago Wheat staged a recovery from the Monday, 18 July 1932 low of US $0.445 per bushel to the high on Friday, 1 January 1937 of US $1.352. Seeing that the United States is facing the same headwinds from a European Sovereign Debt Crisis and a drought not witnessed in 100 plus years, it is safe to assume that capital flight will seek safe harbour in common stocks and commodities. The Chicago Wheat low price of US $5.6525 per bushel on 1 July 2012 is cyclically significant. We could see the price test US $17.1734 per bushel by 2015 or 2020.

"WASHINGTON - U.S. scientists say July was the hottest month ever recorded in the Lower 48 states, breaking a record set during the Dust Bowl of the 1930s. They say climate change is a factor.

And even less a surprise: The U.S. this year keeps setting records for weather extremes, based on the precise calculations that include drought, heavy rainfall, unusual temperatures, and storms.

The average temperature last month was 77.6 degrees (25 Celsius). That breaks the old record from July 1936 by 0.2 degree, according to the National Oceanic and Atmospheric Administration. Records go back to 1895..."

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The FAO Food Price Index (FFPI) averaged 213 points in July 2012, as much as 12 points (6%) up from June, but still well below the peak of 238 points reached in February 2011. The July surge of the Index followed three months of decline.

The sharp rebound was mostly driven by a jump in grain and sugar prices, and more modest increases in oils/fats. International prices of meat and dairy products were little changed.