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 www.climatepredict.com 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.

El Niño, Climate Change & The India Monsoon

El Niño, Climate Change & The India Monsoon

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.

EWet 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.

Complimentary Issue of WeatherWealth: Record global heat, grains, soft commodities, and natural gas

Complimentary Issue of WeatherWealth: Record global heat, grains, soft commodities, and natural gas

Download your free complimentary issue to WeatherWealth. This report does not include specific trade ideas in ETFs, futures, and options reserved for subscribers.

Sign up for a 2-week free trial period (subscriptions) and learn about our advice on grains, coffee, sugar, natural gas, and more.