Weather refuses to rescue natural gas and grain traders from the hungry bears

Weather refuses to rescue natural gas and grain traders from the hungry bears

February 15, 2024

A major stratospheric warming event can sometimes force very cold weather upon key natural gas heating demand areas. This is what normally happens for late February and March when the AO index goes negative. However, I have “faded” this solution to our WeatherWealth clients touting an overall bearish view in natural gas, most of this winter. 

Source:WeatherWealth newsletter at

The record warm global oceans are contributing to latent heat release (evaporation and more water vapor in the Atmosphere). This is resulting in:

  • Improved rain chances for Argentina’s key soybean growing areas again deeper into February
  • Northern Brazil rainfall to rescue a coffee crop, beaten down by previous heat and dryness in December-January
  • A warm global outlook for natural gas regions with weakened LNG exports

In addition,  El Niño has actually strengthened a bit again. The SOI index has gone the most negative of the winter due to the MJO phase, You can see here my warm forecast for the month of March from last week:

Source:WeatherWealth newsletter at

So… how do you trade natural gas, grains and other markets? After all, the CFTC Commitments of Traders report shows a large net short speculative position (managed money) in many commodities that may be bound for profit-taking. That is what we do at WeatherWealth (short and long range weather forecasts, but also specific trading strategies one cannot get from any meteorologist. For example, we told natural gas clients recently about the price comparison to the warm 2020 winter.

(chart) Natural gas prices are mimicking the warm 2020 winter. Prices are even lower than $1.60 in part due to a lack of LNG exports and warm weather in Europe as well as the US

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Climatic Variables  Causing  Record Flooding in Southern Brazil and Extreme Heat in the North?

Climatic Variables Causing Record Flooding in Southern Brazil and Extreme Heat in the North?


These are the climatic factors resulting in incessant rains in southern Brazil, while northern Brazil has record heat:

  1. A mix between strong vs. weak El Niño conditions
  2. The MJO is moving into phase 2/3
  3. Deforestation of the Brazil rainforest

Flooding and landslides triggered by heavy rains in southern Brazil have claimed at least six lives over the past week, The fatalities occurred in the states of Santa Catarina and Rio Grande do Sul, and major property damage in the latter was reported as thousands of people sheltered in gymnasiums.

Southern Brazil has been hit by historic rains in the last few months. This could threaten soybean planting and production in two of Brazil’s key producing states.

Soybean planting in Brazil is way behind schedule (Source: AgResource)

In contrast, extreme heat is threatening soybeans in Matto Gross (the #1 soybean-producing area)

Climatological factors causing a wide variety of Brazil weather

There are a few key factors that can contribute to a pattern of flooding in southern Brazil and heat in the north during November in an El Niño year:

  • El Niño shifts tropical rainfall northward, leaving southern Brazil and Rio Grande do Sul susceptible to frontal systems and atmospheric river events that stall and lead to heavy rainfall and flooding.
  • The warmer tropical Atlantic waters during El Niño allow more moisture transport into southern Brazil, increasing rainfall intensity.
  • With reduced tropical rainfall across northern Brazil during El Niño, prolonged heat is more common as subsidence and dry conditions dominate.
  • Weakened easterly trade winds allow cold fronts to penetrate farther north into Brazil’s northern regions during El Niño.
  • These displaced fronts and overall circulation changes enhance north and south Brazil’s temperature gradient and extremes.
  • Deforestation of the Amazon in conjunction with El Niño, has built a huge, hot ridge in northern Brazil.

We have a mixed situation in the jetstream pattern in the Southern Hemisphere right now, while Pacific Ocean temperatures are incredibly warm, portending strong El Niño conditions, other variables we look at depict weak El Niño conditions.


There is also a climatic phenomenon called the Madden-Julian Oscillation Index (MJO. It is like a traveling pulse of storms and rainfall that moves eastward around the equator, and it is a weather pattern that can influence things like monsoons and tropical cyclones. This makes the weather more active in some regions and quieter in others. Picture it as a cycle of increased and decreased rainfall marching across the globe.

Contrasting two El Niños: The MJO was in similar November phases during these 2 infamous El Niño events. One was weak (2009) and one strong (2015). Both of these years had heavy rains and flooding in parts of southern or central Brazil affecting either sugar cane or soybeans.

This November, it is soybean areas in Rio Grande Do Sul (#2 biggest Brazil soybean producer) and Santa Caterina experiencing the worst effects of flooding.

As my discussion illustrated at the top of this report — El Niño can often bring heavy rains to parts of central or southern Brazil. The most recent infamous case was in the fall (Brazil spring) of 2009. The result was extreme crop stress and dilution of Brazil’s sugar crop.

Brazil’s sugar crop was diluted due to heavy 2009 rains. There was also a drought in India as there was this year.

Global weather and crop conditions suggest two different types of El Niño events

During weaker El Niño events, such as in 2009 (2nd map below), notice how much further north heavy rains were during October than during the strong El Niño of 2015. This was much more of a detriment to the sugar crop than to other commodities like coffee or soybeans.


Global weather patterns are fluctuating between weak and strong El Niño conditions. Despite its weakness, historically weak El Niño events, like 2009-2010, impacted global crops such as sugar and cocoa, leading to notable market volatility.

This season, intensified weather extremes in Brazil, fueled by a strengthened northern Brazil ridge, raise concerns for soybean production in Matto Grosso. The heightened ridge, stronger than in November 2009, may amplify crop problems, underscoring the potential extreme volatility in the soybean market.

Will the 2009-2010 pattern be similar this season for the soybean market? This is what I will be answering for subscribers to my WeatherWealth newsletter.

Frequent trading strategies and long-range weather forecasts are available for multiple commodities.

Solar Cycle 25 & South American Commodity Weather

Solar Cycle 25 & South American Commodity Weather

My video talks about what is going on in South America concerning some new weather problems for soybeans, sugar cane, and possibly coffee (though recent rains have been great news for the early coffee bloom in Brazil).

I also show some interesting images of historic artifacts being exposed by lowering water levels and record drought in the Brazil Amazon, and a look at solar cycle 25 and the active sun. 

Sunspot cycles occur every 11 years. Without going into too much detail, the number of sunspots is approaching 2014 levels. In layman’s terms, this means the next sunspot cycle peak should not occur until at least 2024 or 2025.

In my view, and of many NOAA and MIT scientists: “solar cycles do not have the effect they once had on global weather due to the warming planet and stratosphere.”

Currently, it is El Niño and the Amazon rainforest drought and deforestation emergency that will determine many agricultural commodity price moves based on South American weather over the next few months.

Sign up for my El Niño report and some occasional free weather and commodity updates below.

Sugar and Cocoa Markets Ride the Oceanic Heat Wave from El Niño and Climate Change

Sugar and Cocoa Markets Ride the Oceanic Heat Wave from El Niño and Climate Change

The El Niño-driven bull markets in cocoa and sugar

Two bull markets in soft commodities have been in cocoa and sugar brought on by a variety of summer weather problems from India to Thailand and West Africa.

My cocoa Spider, featured in my WeatherWealth newsletter for about 8 commodities each week, has been basically bullish cocoa since summer. Sometimes it has gone neutral, but overall, we have developed long-term bullish call option spread ideas for summer.

Wet November weather could further compromise cocoa and sugar crops

This time of the year, dry weather is needed for the sugarcane harvest in Thailand (the #3 producer) and in the Ivory Coast and Ghana (top cocoa producers) where the incessant wet weather has caused disease issues all year.

Usually, El Niño can bring wet weather for Thailand in November but typically it dries out in West Africa for the remaining main crop harvest. One such El Niño year that was super wet in Thailand was 1987. The fact that West Africa has remained wet is atypical of El Niño and more so due to warming oceans and Climate Change.

Wet weather in Thailand during November can negatively impact the sugar crop for a few key reasons:

  • Flooding – Heavy November rains in Thailand bring a higher risk of flooding, which damages sugarcane fields and disrupts harvesting.
  • Cloud cover – Increased cloud cover and reduced sunlight slows sugarcane growth during this critical time before the harvest. Photosynthesis is diminished.
  • Disease – Wet conditions promote fungal diseases like red rot, which damages stems and leads to sugar content loss.
  • Delayed harvest – Excess soil moisture makes it harder to operate harvesting equipment on muddy fields. This can delay crop collection.
  • Diluted sucrose – High rainfall right before harvest dilutes the sucrose concentration in stalks, reducing sugar content.
  • Crop loss – Severe floods from monsoons can completely submerge and destroy portions of the sugarcane crop.

Overall, wetter than normal November weather reduces both the quantity and quality of sugarcane yields in Thailand. Dry conditions are needed for optimal sucrose development and timely harvest. Excessive rain has a very detrimental impact on both yields and sugar content for the Thai sugar industry in the critical pre-harvest period.

While adequate rainfall is crucial for cocoa production in Ivory Coast and Ghana, excessive wet weather over months can cause major issues:

  • Prolonged heavy rains increase the prevalence of fungal diseases like black pod rot and myriads. These have caused severe damage to cocoa crops recently in very wet conditions.
  • Overly wet soil makes bean harvesting and drying more difficult. This can delay and disrupt cocoa harvest operations.
  • Persistent moisture also promotes canker and algal bark diseases which damage cocoa tree health and yields.
  • Flooding from heavy rainfall can rot the roots, asphyxiate trees, and reduce yields.
  • Cloudy wet weather slows bean maturation and inhibits optimal flavor development.

So while November rains are important for cocoa pod development, too much rainfall over consecutive months promotes crop diseases, hampers harvest logistics, and reduces bean quality.

El Niño, The Devastating Amazon, Global Crops and Commodities

El Niño, The Devastating Amazon, Global Crops and Commodities

This video (click above) talks about the Amazon rain forest, the teleconnections that will influence November weather, and how heavy rains and flooding in parts of central and southern Brazil are impacting soybean planting, and the sugar cane harvest but benefitting coffee trees.

Learn how to trade commodities and make money here. Download my free El Niño report

What is global angular momentum? How can it influence El Niño and winter weather?

What is global angular momentum? How can it influence El Niño and winter weather?

A cold late October and possibly November will be the rule for parts of the Midwest and Eastern U.S. This is because El Niño is weak-moderate (not a strong El Niño event), and a negative GLAAM is present.

The video above discusses Global Atmospheric Angular Momentum (GLAAM) and how that can influence El Niño and winter weather.

A cold late fall and early winter could keep natural gas prices firm on breaks if (GLAAM) remains negative and El Niño does not strengthen.

However, it remains to be seen if there will be a longer-term bull market in natural gas, for which inventories are still large. The recent rally in prices was due to pre-winter hedge fund buying, war tensions overseas, and lower rig counts,

If GLAAM remains negative and El Niño is weaker

The globe had yet another record-warm year and the Arctic and oceans are warming at a record pace. This could offset what would otherwise be a consistent severely cold northern Hemispheric winter. But if global angular momentum (GLAAM) remains negative, this could offset Climate Change a bit.

If GLAAM becomes positive and El Niño strengthens

In contrast, strong El Niño events are often accompanied by positive GLAAM and warm winters. If this occurs, a bear market in natural gas prices will occur.

I will be developing various natural gas futures, options, and ETF strategies for subscribers, shortly.

January snow cover with negative and positive GLAAM

Below are images from my weather forecast program This is available for FREE to subscribers to my WeatherWealth newsletter.

By mid-winter, negative GLAAM winters typically have above-normal snowfall in the Northeast and parts of Europe and Asia (bottom image).

Negative GLAAM usually refers to La Niña, but there are weak to moderate El Niño events that can occur and be quite snowy.

In contrast, the winters with the strongest +GLAAM (top image) and El Niño have below-normal snowfall in the eastern U.S. and would be bad news for ski resorts and bearish implications for natural gas and heating oil spreads. However, winter has not started yet and a lot can happen.

Negative GLAAM winters often are snowy in parts of the eastern U.S., Europe, and Asia.

Feel free to download a complimentary full El Niño report by clicking below, which covers agricultural commodities and natural gas.