There is a little tropical wave called the MJO that for many years was not taken into account by meteorologists, or many global forecast models. In recent years, these storm impulses have become much more precocious in the minds of many weather forecasters. I believe that because increasing warming oceans, brought on by global warming, that these systems are stronger than they once were and can, at times, alter conventional methods of weather forecasting.

The further the MJO is away from the center of this map, the stronger it is. It is currently moving across the western Pacific and by early November will be moving closer to west Africa. The strong MJO this fall, combined with a warm Atlantic and developing weak La Nina, were key ingredients for an active hurricane season this year.

MJO Phases

The movement of the MJO can also affect the global jet stream pattern.

MJO, phase, forecast

The natural gas market has taken notice for the colder early November weather, something we alerted clients about last week, that models were not cold enough.  You can see the red (warm) ridge out west that will aggravate the brush fires and the colder Midwest and Eastern weather that may bring about some snows.  This has been the reason natural gas prices have rallied a bit. But will it last for winter? Only paid customers will know that answer:

forecast, model, European

La Nina

What about La Nina? NOAA and many others are talking about a warm winter and often it makes sense to fade the crowd. Where the MJO migrates to for the rest of the winter and how strong La Nina becomes will have huge impacts in the natural gas and heating oil market in the months ahead.

For the time being, here are the typical rainfall patterns associated with La Nina. For example, the developing wet weather in N. Brazil has put pressure on coffee prices lately as Brazil could harvest a huge crop. However, Argentina sometimes becomes too dry for corn and soybean crops heading into December (a critical time of the year for early germination and development for grains).

Traders will be watching closely for these developments, as there are other teleconnections that I see, that may not be as detrimental to some grain crops, as other firms suggest. Corn and soybeans will have huge swings on winter (South American summer) weather in the weeks and months ahead. Typically during La Nina, west African cocoa crops benefit and is a bearish influence eventually, while U.S. plains wheat weather is dry in the winter and spring. If this happens, then the 5-6 year bear market in wheat, may come to an end before or by next spring.

La Nina, commodity, futures

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