There’s a new bull market in town other than cocoa, gold, silver, and most recently crude oil (Middle East tensions and stronger global demand). It is coffee. Our WeatherWealth newsletter https://www.bestweatherinc.com/membership-sign-up/ advised clients close to a month ago about a potential severe drought developing for Robusta Vietnam crop regions (similar to the lingering spring El Niño conditions in 2016).
In contrast to other firms suggesting La Niña will form this summer, we have disagreed. In fact, some computer models just came out agreeing with our feeling that occasional weak El Niño conditions will persist until at least June or July.
So… how does that influence global coffee weather? For one thing, it may turn too wet for parts of northern Brazil’s coffee, following earlier heat and dryness in December-January. This was related.
Not only due to El Niño but also to deforestation in the Amazon and climate change.
Source: EPA.GOV
However, of even greater concern is the continuation of record levels of tight Robusta coffee supplies. Irrigation levels are extremely low. Combine this with nearly record April heat (map below) and a pesky high-pressure ridge, and one can see why Robusta prices are testing historic high levels.
Another parabolic commodity move, similar to cocoa as the planet continues to warm
Consequently, will I change my forecast to more rain and a bearish outlook? How does one use coffee spreads, futures, or options to potentially capitalize on the lingering El Niño? That is where WeatherWealth comes in. Please feel free to click on the link at the top of the page for a 2-week free trial period covering all Ag and natural gas markets. You will also receive my BestWeather Spiders with trade sentiment for a dozen commodity products… for example: Robusta coffee advised a month ago.
The temperature index score is now very bullish at a +4 with record heat in Vietnam. This makes the total score very bullish at at least a +9.
by Jim Roemer – Meteorologist – Commodity Trading Advisor – Principal, Best Weather Inc. & Climate Predict – Publisher, Weather Wealth Newsletter
Thursday Evening Weekend Report – March 28-31, 2024
Worried about losing one second of time? The melting Polar Vortex is not only creating more and more of a warming planet, but is also speeding up the Earth.
My video (above) addresses how I predicted another warm winter, the collapse in natural gas prices and which analog years might be helpful to predict summer grain markets and crops. Enjoy!
Anyway, in the next couple of years, we’ll all lose one second from our day. It may not seem like much, but this tiny adjustment to our clocks is being impacted by the massive melting of polar ice due to climate change.
The length of our days is determined by the Earth’s rotation speed. As that spin gradually changes based on shifts in the planet’s surface and molten core, we occasionally need to add or subtract a “leap second” to stay in sync.
Source:NOAA
While we’ve added plenty of extra seconds over time as the rotation slowed, the Earth is now speeding up again. For the first time ever, we’ll need to remove a second instead of adding one. But, the unprecedented removal could create unforeseen issues for computing systems used to only adding time.
The kicker? This leap second subtraction was originally forecasted for 2026, based on the accelerating spin. However, the study shows the melting ice caps are enough to delay that milestone day of lost time all the way until 2029. A tiny difference, but one more stark reminder of the profound impact human-caused global warming has on the fundamental systems that govern our world.
In just a couple years, we’ll actually need to remove a second from our clocks – something that’s never been done before. And the surprising reason? Human-caused polar ice melt.
While the slowing effect of tides has dominated Earth’s rotation changes historically, the melting ice sheets are now a major factor speeding up our planet’s spin. As that ice shifts from the poles towards the equator, it’s causing the entire Earth to rotate faster, like a figure skater pulling in their arms.
However, another force in the planet’s core is outweighing even the ice melt acceleration right now. We don’t fully understand these mysterious core processes 1,800 miles below, but they are inexplicably spinning up the solid outer shell independent of the liquid core’s motion.
The net result is an increasingly sped-up rotation requiring that unprecedented “leap second” subtraction soon, (likely in 2026) according to the study. It’s a seemingly minuscule adjustment, but one with huge implications for things like stock exchanges and computing systems only designed to add time, never remove it.
To me, it’s simply astounding that human activities like burning fossil fuels have now measurably altered something as fundamental as the literal spin of our entire planet on its axis. A stark reminder of our growing impacts.
When it comes to commodities, One of the impacts has of course been the collapse in natural gas prices once again. Selling natural gas in the fall and getting out in the early spring has worked “almost every time” the last few years. My Spider, which was firmly bearish at a -8 back in December, is a bit more neutral now at these prices, but I see nothing to get excited about in this market given such massive global supplies
As we head towards the spring and summer weather markets in grains and soft commodities, find out how to trade better, get a jump ahead of other weather forecast firms, with a 2-week free trial period to WeatherWealth, here:
African dust, the Harmattan Wind, and how I called the unprecedented explosion in cocoa prices three weeks ago.
Why El Niño has strengthened recently: Potential impacts for grain prices and the Midwest summer
Why record-warm global oceans have thwarted any bull move in natural gas prices
A look at potential late February and March weather
Join farmers, traders, and investors on six continents who have benefited from a seasoned meteorologist’s 38 years of experience as he second-guesses standard computer models. What is the next big trade in Ag commodities? Is it too late to buy cocoa and go short the grains?
This video addresses the climatic factors that are causing an unprecedented price move in cocoa and what will bring drought-easing rains to Plains wheat — Enjoy!
Our BestWeather Spider became bullish more than a week ago, catching this historic move up in prices on new concerns about a dry, dusty wind in West Africa called the “Harmattan.” However, at these price levels, the only way to trade cocoa is by using sophisticated strategies in options and spreads, as we already had the move I expected.
Jim Roemer, Scott Mathews, and The Weather Wealth Team
Please feel free to learn about Jim Roemer, our track record, and how we use weather to help traders, hedgers, and investors. If you have any questions, please don’t hesitate to drop me a line – Scott Mathews, Editor
Mr. Roemer owns Best Weather Inc., offering weather-related blogs for commodity traders and farmers. He also is a co-founder of Climate Predict, a detailed long-range global weather forecast tool. As one of the first meteorologists to become an NFA registered Commodity Trading Advisor, he has worked with major hedge funds, Midwest farmers, and individual traders for over 35 years. With a special emphasis on interpreting market psychology, coupled with his short and long-term trend forecasting in grains, softs, and the energy markets, he established a unique standing among advisors in the commodity risk management industry.
Trading futures and options involves a significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results. There is no warranty or representation that accounts following any trading program will be profitable.
“You can’t change the weather, but you can profit from it”
(Our video from last week addresses why we reversed our bullish attitude in natural gas early this past week and enumerates the implications for South American grain weather.) It’s a bit too late to sell natural gas in the hole now, especially with a potential friendly EIA number later this week.
El Niño usually brings big crops to Argentina
It is common knowledge that more than 80% of the time, El Niño brings above the normal corn and soybean yields in Argentina and southern Brazil, but can often bring dryness and reduced crops in northern Brazil. This certainly happened earlier this winter (South American summer) with drought hurting Matto Grosso soybean yields. Nevertheless, we had been in the bearish camp for weeks in soybeans due to worries over the Chinese economy and our earlier forecast that South American weather and crop conditions would improve.
Click on this image In the above video, I cover the following:
A) Why late January and February heat and dryness in Argentina is unusual during El Niño but some problems may develop from excessive heat;
B) How teleconnections such as the MJO and AO index can affect South American corn and soybean weather in February and offset typical ideal “El Niño type” weather (too wet at times for the northern Brazil soybean harvest and some potential minor issues resulting from hot and dry in Argentina);
C) How we warned clients of a top in the natural gas market by predicting a +AO index;
D) How the Red Sea tensions have helped markets such as Robusta coffee and cocoa soar. These two markets already have had tight supplies due to El Niño-related crop problems (Brazil coffee weather will continue to improve vs. some previous crop reduction issues);
E) If February is hot and dry in Argentina, this might suggest that the 1987-88 El Niño analog could hold, suggesting the potential for summer Midwest weather problems affecting corn and soybeans (right now we are not calling for this, but something to watch).
f you have not yet had a complimentary trial to WeatherWealth, please request one, and join farmers, ETF investors, and futures traders on six continents and those who just want better (more accurate) short and long-range weather forecasts, often before markets react. While past performance is not indicative of future results, calling the $1 collapse in soybeans the last 6 weeks and the recent huge weather market natural gas volatility pays for the newsletter for years in just a matter of weeks.
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