by Jim Roemer – Meteorologist – Commodity Trading Advisor – Principal, Best Weather Inc. & Climate Predict – Publisher, Weather Wealth Newsletter
Mid-Week Advisory – August 7, 2024
In the coming weeks, I will have a special report about A.I. technology, weather forecasting, and commodity trading. You can sign up here to receive that and see a previous Weather Wealth report (from June), when I became bearish on corn and soybeans, based on my summer weather forecast for good Midwest crops and No La Niña.
So… how did we “out-forecast” all of the other weather firms and even some A.I. models that La Nina would not form this summer and that we would have a bear market in grains and excellent crops?
What most computer models miss is something we call “connecting the teleconnections.” The lion’s share of weather models uses ocean temperatures and local current conditions in thousands of cities to create algorithms that go into the European and GFS weather models. While these models have improved, thus allowing NOAA and many similar agencies to make fairly accurate weather forecasts, they often miss commodity weather more than two weeks in advance.
Teleconnections “connect” the dots between ocean temperatures and weather patterns thousands of miles away.
As you can see from my in-house program ClimatePredict (one of the few weather models in the world that incorporates teleconnections and historical weather trends), my prediction last April was that July was going to be great for most midwest corn and soybean crops. That will continue over 80% of the Midwest grain belt through August. Our one concern is the dryness for Kansas and wet weather delaying spring wheat harvesting in Russia.
My program has also been predicting improved global weather for sugar. soybeans, corn and potential cocoa crops going deeper into 2024 and 2025.
Anyway, at least two-thirds of the above-mentioned years that had many similar summer weather conditions in the Northern Hemisphere did not transition to La Nina until after October or not at all. Now, two to three months later, many models (such as the European) are not predicting that La Nina will form at all this year. How about that?
In addition, Warm ocean temperatures in the western Equatorial Pacific has resulted in the SOI (Southern Oscillation Index) being negative off and on this summer. This has cut down on the chance of La Nina, anytime soon.
This could have huge implications on commodities and possibly also suggest the hurricane season will NOT be as active as NOAA and many other services have been suggesting. Still, historic record warm ocean temperatures portend that one of two hurricanes later this fall could still explode into at least a cat 4.
Source: WeatherWealth newsletter
Thanks for your interest in commodity weather!
Jim Roemer, Scott Mathews, and The Weather Wealth Team
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.
1) A look at recent rainfall maps in the corn belt and why the grain market has not yet gotten excited about potential hot weather deeper in June or early July;
2) Rainfall forecast for the next 10 days. Some flooding and severe weather are possible in the northwest corn belt. Will this cause some replanting of corn over to soybeans?
3) Strong El Niño events… How often did they transition to La Niña?
4) Why El Niño neutral conditions should exist through at least August.What does this mean? Weather and market volatility with a fluctuating SOI index;
5) Mexico’s record heat and drought. Indications for July temperatures?
6) A look at soft commodities and market action for orange juice, coffee, and sugar;
7) What does another record-warm winter suggest for summer temperatures? Are sunspots to blame?
Please feel free to download a complimentary past issue of WeatherWealth if you have not done so before.
by Jim Roemer – Meteorologist – Commodity Trading Advisor – Principal, Best Weather Inc. & Climate Predict – Publisher, Weather Wealth Newsletter
Memorial Day Weekend Report: May 24-27, 2024
Silver plays a crucial role in the global green economy, particularly in renewable energy technologies and sustainable practices. With more global weather extremes and record-warm oceans, environmental technologies that utilize silver will only grow in the years ahead.
We have been slapped with unprecedented weather events: Historic snowfalls in California this winter and the rapid melting of Arctic ice. In addition, we have witnessed floods and landslides from Houston to southern Brazil.
The need for new technologies to combat climate change is being accelerated by only a few of the dozens of weather extremes.
Source: chart by KITCO and comments by Best Weather, Inc.
Just take a look at how record-breaking global ocean temperatures brought on climate change (to a greater extent than by El Niño) is opening the door for more silver-based technologies in the environmental sector.
We are seeing the silver market soar and the inevitable scenario is on the horizon for a $50 per ounce price tag.
Solar Energy: Silver is an essential component in photovoltaic (PV) cells built into solar panels. Silver paste is applied to silicon wafers that conduct the electricity generated from sunlight. In 2020, over 100 million ounces of silver were consumed in PV cells for solar energy. As the world transitions to renewable energy sources, demand for silver in solar panels is expected to grow significantly.
E l e c t r i c V e h i c l e s: Silver is widely used in automotive electrical systems due to its excellent conductivity. Nearly all electrical connections in modern automobiles, including those in electric and hybrid vehicles, are outfitted with silver-coated contacts and membrane switches. The rise of electric vehicles will drive increased silver demand.
W a t e r P u r i f i c a t i o n: Silver is used in water purification systems, both residential and commercial, due to its antibacterial properties. As the green economy emphasizes sustainable water management, the use of silver-based water purifiers is likely to increase.
R e n e w a b l e E n e r g y S t o r a g e: Silver is a key component in batteries used for storing energy from renewable sources like solar and wind. The growth of renewable energy will necessitate more efficient energy storage solutions, boosting silver demand.
A n t i b a c t e r i a l A p p l i c a t i o n s: Silver’s antimicrobial properties make it valuable in various green applications, such as textiles, bandages, and medical equipment, reducing the need for harmful chemicals.
When it comes to weather forecasting and my commodity analysis, I don’t write about the technology in the business of artificial intelligence. Nevertheless, silver has several important applications related to AI.
Silver is an excellent conductor of electricity, making it essential for electronic components in AI systems like computer chips, circuit boards, and interconnects. Its high electrical conductivity allows for efficient data transfer and processing. It is used in memristor devices, which can mimic the behavior of biological neurons and synapses. Memristors made with silver nano-wires can form artificial neural networks for neuromorphic computing, a brain-inspired approach to AI. Silver nanoparticles and nano-wires are being researched for use in random access memory (RAM) and non-volatile memory devices that could enable faster and more energy-efficient AI hardware.
As I mentioned above, silver is a crucial material in solar panels due to its superior electrical conductivity. Because AI systems require immense computing power and energy, solar panels with silver play a role in providing renewable energy for AI data centers.
So… in summary, silver’s unique properties make it an indispensable material in the global green economy, and AI technology, particularly in renewable energy expansion, sustainable water management, and eco-friendly applications that prioritize resource efficiency and environmental stewardship.
Join ETF investors, commodity traders, and farmers who want a huge advantage in understanding how the global climate is affecting everything from coffee and soybean futures to cocoa and even silver. Receive a 2-week free trial period to WeatherWealth. https://www.bestweatherinc.com/new-membership-options/
(The only all-global weather and commodity newsletter with trading ideas)
Thanks for your interest in commodity weather!
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 involve 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”
El Niño weather conditions can have varying impacts on different commodity sectors. Here are some of the sectors typically most adversely affected during El Niño years:
Agriculture – El Niño often brings heavy rains and flooding to parts of South America, which can damage crops like soybeans, corn, wheat, rice, coffee and sugarcane. Food production and crop yields tend to decline in affected regions.
Energy – El Niño winters tend to be warmer than average in the US, decreasing demand for heating oil and natural gas. Milder winters can also reduce electricity demand. This drop in energy demand can negatively impact the oil, natural gas and power sectors.
Metals & Mining – Heavy rains from El Niño can disrupt mining operations for commodities like coal, copper, iron ore and gold in countries like Indonesia, Chile, Peru and Australia. This can constrain output and drive prices higher.
Palm Oil – Production of palm oil in Southeast Asia, especially in Malaysia and Indonesia, tends to fall during El Niño events due to reduced rainfall and drought conditions. Supply disruptions can lead to higher prices.
Fishmeal – El Niño conditions often drive anchovy populations away from the coast of Peru, resulting in reduced catches of this fish that is processed into fishmeal and fish oil. This can impact the global supply of fishmeal for animal feed.
Presently, this is what I have been watching for my WeatherWealth newsletter clients with various futures, ETFs and option trade ideas. Climate change is also having a major global effect.
A) Weak Indian Monsoon for oilseeds, sugar, wheat, oilseeds, rice, and possibly cotton
B) Australia’s and Argentina’s developing drought for wheat
C) China’s historical heat waves and mixed floods and droughts may have damaged some of the corn and especially cotton crops.
D)Record warm oceans creating too much rain for the West African cocoa crop where disease issues have helped prices rally 10% more in the last 2 months.
E) Wet September weather in northern Brazil could cause some harvest delays or sucrose dilution to the sugar crop and cause an early bloom for coffee that is not wanted
India’s August rainfall may be the lowest since 1901
El Niño often disrupts the Indian Monsoon. The monsoon is very important to India’s economy and has a $3 trillion annual effect on agriculture. Presently, it is the driest since 1901 and I do not see that trend changing, following excellent July rains. This will have a “lag” effect on markets such as soybean oil, sugar, rice, wheat, and possibly cotton and be one partially bullish factor in these markets.
Other than off-again, on-again news about the Ukraine-Russian grain initiative that is affecting trading, this video below talks more about El Nino, the Canada drought, and improving Midwest grain weather.
HELPING YOU MAKE THE BEST INVESTMENT DECISIONS BASED ON THE WEATHER
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