1) What is the Western Pacific Warm Pool and why it has delayed La Niña
2) How the 2022 Tonga volcanoes may have contributed to the western Pacific warming
3) How our computer program www.climatepredict.com forecasted a warm autumn that has pressured natural gas prices
(available to subscribers to our newsletter WeatherWealth)
4) An historical look at why natural gas prices have fallen in four out of the last five consecutive autumn-to-early-winter periods.
Given the record warm oceans and Gulf of Mexico, a tropical storm or hurricane is not out of the realm of possibilities for November 7th-8th.
Sign up for a two-week free trial period to WeatherWealth and you can see our recent trading strategies for coffee, sugar, grains, and more and how to potentially trade these markets in the future.
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.
On the date of publication, Jim Roemer did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
click on video below of renowned meteorologist and commodity investing analyst Jim Roemer riding out the hurricane in Sarasota.
Windows being blown out of building and trees down. However, the situation for this area could have been a lot worse if Milton did not weaken at landfall. Though NOAA and others are saying it landed as a CAT 3 hurricane, sustained winds of around 80-90 MPH with gusts to 100 or so, was really a strong Cat 2. A big difference, though certainly many communities around Tampa, etc. had severe flooding. Tornadoes were the biggest threat in Florida (a record number)
“The record summer +NAO index and its impact on the weak hurricane season and commodities”
by Jim Roemer – Meteorologist – Commodity Trading Advisor – Principal, Best Weather Inc. & Climate Predict – Publisher, Weather Wealth Newsletter
Weekend Report – September 6-8, 2024
Background of the NAO index and its potential i& influence on the Atlantic hurricane season
The NAO (North Atlantic Oscillation Index) is one of the most important teleconnections to predict winter weather for the natural gas market. It has to do with how surface pressures fare over Greenland and the Azores to the west of Africa. When the NAO is negative in winter, this means high pressure over Greenland that can sometimes bring onslaughts of cold winter weather to Europe and/or the U.S.
However, the positive NAO index also helped us predict record midwest summer grain crops for corn and soybeans and will have implications for soft commodities in the months ahead.The record-warm Arctic combined with mostly a positive NAO index (low pressure off Greenland and high pressure over the Azores) has resulted in several warm winters in a row.
A trader could have sold natural gas at some point in time in November or December in each of the last three to four years and made 30-50% on his/her money by March.
Anyway, the NAO index also has some influence on U.S. summer grain weather and soft commodities, as well as repercussions for the Atlantic hurricane season. Models have been overzealous, forecasting potential hurricanes due to all this African dust you see in the image below.
Nevertheless, storms that “originate” in the Gulf are often not affected by African dust–just waves coming off the coast of West Africa. Near record warm ocean temps could result in rapid intensification of a tropical storm early this week in the Gulf. However, no immediate major hurricane is expected.
Shown below are four graphic images I put together:
(upper left) A negative NAO indexresults in below-average African dust and often an active Atlantic hurricane season when an “El Niño neutral” or La Niña is present.
(lower left) The NAO indexhas hit arecord high this summer at 3.15
(upper right) The correlation of a +NAO (shown on my weather forecast program ClimatePredict) depicts thattotal Atlantic Cyclone Energy and the number of strong storms are below normal. This is in contrast to NOAA as well as many other entities out there who wrongly predicted a few months ago, one of the strongest hurricane seasons on record.
(lower right) Low pressure over Greenland responsible for the +NAO
How can the NAO index give clues about commodity weather?
Take a look at the correlation for September rainfall over northern Brazil when the NAO is positive. There is a negative correlation with rainfall. This implies the severe drought continuing for key Brazilian sugar cane crops, coffee, and orange production areas. OJ prices are making all-time highs on the combination of Florida’s lowest crop in decades, and also a 25% reduction in Brazil’s 2024 crop. The 2025 crop may see more of the same.
Soybean traders will also be watching Brazil’s planting weather in another few weeks or so. A severe drought is unusual if La Niña forms in northern Brazil, but deforestation of the Amazon is offsetting some standard climatological signals.
Of course, the NAO is only one of many teleconnections. See how my program has 28 of them. These helped me “second guess” standard computer models last June in predicting that La Niña would not form this summer and the Midwest would have huge corn and soybean crops.
What is my forecast for the important October coffee bloom in Brazil?
When, if at all, will the sugar market begin to respond to the drought?
Which trading strategies am I employing in futures or options for WeatherWealth clients?
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.
Most recently, since June,we’ve stated our opinion that “fading” ALL computer models that suggested La Niña would form later this summer. In addition, all these summer grain market bulls “completely missed the boat” as our clients were advised about a potential collapse in corn and soybeans, as early as mid June on perfect summer corn belt weather!
How did we do that? First of all … standard GFS and European models are “free to the public.” You get what you pay for: erroneous models which often cannot forecast the weather accurately more than a few days in advance.
My 40-year experience in “second-guessing” computer models and my understanding of market psychology comprise The Key.
We also offer our in-house long-range weather software that all subscribers can access. It is called ClimatePredict (www.climatepredict.com).
It performs analyses of the history and behavior of teleconnections and correlates agricultural commodity crop growing areas, while incorporating:
Arctic Sea Ice (or lack thereof);
Better prediction of El Niño or La Niña;
Ocean temperatures thousands of miles away,
Dozens of other phenomena, etc
Jim Roemer’s initial objective, back in June of $9.50 soybeans (from $11) and sub $4.00 corn, helped farmers hedge their production weeks ago and aided traders in adopting various futures and options strategies. In only a couple of months, one trade alone (just in grains) would have paid for my newsletter for several years.
We are finally seeing the signs of potentially the first weather scare of the summer for some hot-dry weather. Is it time to buy corn and soybeans? Are the markets oversold?
This installment, early last week, discussed the following:
1) Fading computer models all summer, predicting record corn and soybean yields for Midwest grain farmers and the bear market (back in June). Will prices for soybeans reach $9?
2) Best Weather Spiders: How to use them to trade Ag and natural gas commodities
3) Why the next big bull market may be in coffeeas extreme drought remains in Brazil & how recent coffee market volatility based on varying weather forecasts from the recent very light Brazil frost
4) Why our bearish outlook in sugar prices from 21 cents predicting a great Indian Monsoon has now been scaled back
5) Climate Predict: BestWeather’s in-house weather and crop production model for global commodities (free with an annual subscription to WeatherWealth)
6) Trade ideas from grains to soft commodities and natural gas
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.
by Jim Roemer – Meteorologist – Commodity Trading Advisor – Principal, Best Weather Inc. & Climate Predict – Publisher, Weather Wealth Newsletter
It is already well known that U.S. corn yields may surpass 180 bushels per acre and for soybeans, at least 51 bushels per acre. There still continues to be some amateur meteorologists and/or advisory services out there that are talking about everything from hot/dry western corn belt weather, to drought in Ukraine, flooding to Russia’s spring wheat crop, hoping for a bull market. Sorry, Folks … it is n o t g o i n g t o h a p p e n at any time soon.
In addition, La Niña may be super weak later this year and does NOT necessarily portend major weather problems for southern Brazil or Argentina after November.
Presently, notice how the Southern Oscillation Index (SOI) is negative (El Niño like). The SOI index is a major climatological variable that influences the formation of La Niña or El Niño. The index needs to be positive for 2-3 months for NOAA to officially claim a La Niña is present. When that happens, low pressure sets up over Australia and high pressure near Tahiti. The Trade Winds then blow strong from east to west over the equator bringing cooler waters further west. As you can see, there are still warm waters to the east of Australia.
To make matters worse, if a narcissistic pathological liar gets elected as President… one who only cares about himself, not about you! (you know who I am talking about), and, if you are a farmer, then there are more problems ahead for lower grain prices. You are not only going to have to contend with storage of a record 2024 corn and soybean crop, demand worries from China but a possible Trade War with China.
With regards to the weather, we told our WeatherWealth clients late last week…
…that stratospheric warming (39-50 miles up above the atmosphere) was going to force the Arctic Oscillation Index to go negative. This is a warm block aloft, above the western Arctic circle that is going to push cool fronts over the Midwest the next 2 weeks and result in more ample rain and NO extreme heat.
Combine the negative AO index and NO La Niña yet and you have the continuation of mostly ideal weather in August for Midwest crops.
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.
HELPING YOU MAKE THE BEST INVESTMENT DECISIONS BASED ON THE WEATHER
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