WEATHER WEALTH SAMPLE CONTENT
HELPING YOU MAKE THE BEST INVESTMENT DECISIONS BASED ON THE WEATHER
WINDY TV—Play With It; Have Fun. The AO Index and Colder U.S. Weather, Again??
Feet of snow will continue to bless ski resorts from Colorado to Utah and California well into January, with New England ski areas benefitting from a foot or more of snow by December 30th. While snows have been a consistent feature for many U.S. ski resorts, natural gas prices have whip-sawed with a volatile weather pattern since November.
“This has been a much more difficult winter forecast to predict with a whole host of different analog years to look at from the past. Most weak La Nina events do portend an overall cold January-March weather pattern, but several other variables suggest lots of volatility in the U.S. pattern.”
Late last week we started seeing unusual colds and snows in Eurasia starting to predict a building ridge over Alaska by early January. Called a negative EPO (Eastern Pacific Oscillation Index), this feature can sometimes also force the polar vortex south and influence the formation of a negative Arctic Oscillation Index (negative AO). If this occurs then a much more steady, consistent rally in natural gas will occur throughout the month.
Big warmth in the east over the next 10 days could still pressure heating oil but if the AO becomes negative could result in a much colder winter in European and Eastern U.S. heating oil areas a bit later on. Also, crude oil appears to be breaking out due to other non weather factors.
Unfortunately, because of strict client obligations, we cannot update wth respect to natural gas weather nor the market on a daily or consistent basis. But eventually, we plan to publish a monthly newsletter.
Weather enthusiasts can go to our front page of our site towards the bottom and play around with WINDYTV by scrolling in and out, rotating the globe to different sizes and using the European and GFS model forecasts to see snow and temperature trends anywhere in the world.
WINDYTV—GO TO OUR FRONT PAGE TOWARDS THE BOTTOM
Why has Robusta Coffee (instant coffee) been rallying and Arabica Coffee (Brazil) Near Contract Lows?
LISTEN TO AUDIO—-It is possible coffee prices could be near a low given some dryness in NE Brazil and too wet for the Vietnam Harvest
Historical Coffee Spreads between Robusta/Arabica–More flooding to Vietnam coffee may keep Robusta prices strong in the short term vs big production in Brazil hurting the NY coffee contract
Record Warmth Coming to the East By Christmas/ Teleconnections and Great Skiing Out West
The weather pattern is such that tons more snow will fall on western ski resorts through early-mid January, while eastern regions see less optimal conditions. By Christmas, near or record warmth will affect the east, as I advertised eight days ago. While many forecasters point to a La Nina Modaki (west based weak La Nina) to predict a cold January, these teleconnections below say otherwise. A lack of stratospheric warming aloft, plus various factors related to global angular momentum acting more like a weak El Nino, etc., suggest a warm pattern through mid January for much of the eastern half of the U.S. The drought stricken west will receive feet more snow over the next 2 weeks for skiing and will ease the water restriction situation.
Heavy rains in Argentina breaking the soybean market, tons of snow for the western U.S. are all signs that the atmosphere is not necessarily acting like a La Nina, The AO, NAO and other teleconnections will remain positive suggesting warm weather for U.S. energy areas and little chance for a major rally in natural gas prices over the next couple weeks.
TELECONNECTIONS ABOVE SUPPLIED BY WEATHERBELL, INC.
Places to go Skiing through January 10th are places like Snowbird, Utah, with tons more snow coming with 2 more storms around Christmas and then January 5th. The Sierras, Cascades too will see some of the best late December and early January ski conditions in several years.
www.snowbird.com
South American Precipitation and Teleconnections
A brief look at the current conditions hint at a better outlook than most La Nina years. The connection between La Nina and poor grain yields in South America is well documented. However, correlations show that a warm Atlantic and a -AAO compete with this precipitation regime. It appears that Atlantic sea surface temperature influence, AAO and others are dominating, with above normal rainfall forecasted over the next few weeks. Argentina’s soybean areas in Cordoba & Buenos Aires, will gain from this much needed rainfall, after a drier start to the season. These teleconnection values from November (coupled with the fact that this year’s La Nina Modaki is weak at best) lead us to downplay South American problems in the coming season.
Our Longer Term Bearish View in Cocoa Continues. Any Chance for a Winter Harmattan?
More than 3 months ago, we began predicting a slide in cocoa prices in the $3000/ton area. Prices have since collapsed close to 30% on a variety of factors. While the main impetus in the free-fall in cocoa has been the stronger dollar and worries about Brexit and less European demand and grind data, global weather has been at least as important.
However, given the stocks to usage ratio still at a historically tight level, prices much below these levels for now ($2100) could be difficult in the short term. Most specs have been forced out of the market and the committment of traders is showing the biggest net short position in years. This means that a short covering rally could occur for a while, as at these prices, demand could pick up.
Last summer, we began using our analysts program to predict a healthy end to the west Africa main crop and a good mid-crop. We began forecasting a “rebound” in global cocoa production for this next year and possibly a surplus (not a deficit) in supplies, in contrast to many bullish forecasting out there.
The one saving grace for cocoa prices would be a strong winter west Africa Harmattan. The occasional strong, dusty Sahara wind could sap cocoa trees in winter and lower west African production. This occurred a year or so ago and was partly responsible for the rally in cocoa prices. However, as my Climatech program has been showing for months, these important teleconnections portend above normal rainfall (blue) this winter and a low chance for a Winter Harmattan. You can see how we predicted this back in October, when cocoa prices were 20% higher than where they are now. Hence, any demand related rally at these cheap prices may be met, later this winter and next spring with selling if global weather developments continue ideal.
Climatech has blown away the competition when it comes to forecasting tropical commodities such as cocoa