As the second half of the year gets underway, commodities king Dennis Gartman has his eyes on one market that he believes is poised to surge: agriculture.
Corn, wheat and soybean prices saw a massive rally this last week after the USDA reported that grain prices could rally in 2015 and 2016 as a result of crop damage and harvest delays due to excessive rainfall. Corn and wheat soared to year-to-date highs and soybean hit its highest levels since January.
"Usually we get rallies in June and July on drought conditions, but this year we're getting rallies in the grain markets on excess of rain conditions," Gartman said last week on CNBC's "Futures Now."
The NOAA's National Centers for Environmental Information reports that May 2015 was the wettest month on record, with data going back 121 years. The month of June was also one for the books, as record rainfall flooded many regions in the U.S.
"The grain markets have taken off, interestingly enough, because there is too much water and we haven't been able to get the crops in the ground," said Gartman, editor and publisher of The Gartman Letter. "Further, the crops that have gotten planted will likely be sending their roots less deep into the soil, putting them at risk of drier conditions in July and August."
The USDA reported that as of June 21, around 19 percent of the winter wheat crop was harvested, which is well below five-year average of 31 percent for this time of year.
Of the grains, Gartman said he would rather buy corn over wheat, as a strong dollar makes our wheat crop expensive compared to other international exports, which could weigh on the wheat trade.