How a lingering El Niño & Climate Change are creating a new bull market in coffee futures

How a lingering El Niño & Climate Change are creating a new bull market in coffee futures

There’s a new bull market in town other than cocoa, gold, silver, and most recently crude oil (Middle East tensions and stronger global demand). It is coffee. Our WeatherWealth newsletter advised clients close to a month ago about a potential severe drought developing for Robusta Vietnam crop regions (similar to the lingering spring El Niño conditions in 2016). 

In contrast to other firms suggesting La Niña will form this summer, we have disagreed. In fact, some computer models just came out agreeing with our feeling that occasional weak El Niño  conditions will persist until at least June or July.

So… how does that influence global coffee weather? For one thing, it may turn too wet for parts of northern Brazil’s coffee, following earlier heat and dryness in December-January. This was related.

Not only due to El Niño but also to deforestation in the Amazon and climate change.

Source: EPA.GOV

However, of even greater concern is the continuation of record levels of tight Robusta coffee supplies. Irrigation levels are extremely low. Combine this with nearly record April heat (map below) and a pesky high-pressure ridge, and one can see why Robusta prices are testing historic high levels.

Another parabolic commodity move, similar to cocoa as the planet continues to warm

Consequently, will I change my forecast to more rain and a bearish outlook? How does one use coffee spreads, futures, or options to potentially capitalize on the lingering El Niño? That is where WeatherWealth comes in. Please feel free to click on the link at the top of the page for a 2-week free trial period covering all Ag and natural gas markets. You will also receive my BestWeather Spiders with trade sentiment for a dozen commodity products… for example: Robusta coffee advised a month ago.

The temperature index score is now very bullish at a +4 with record heat in Vietnam. This makes the total score very bullish at at least a +9.

Best Weather Spider (sentiment index)

Jim Roemer

Earth’s Accelerating Spin: How Melting Poles Impact Natural Gas and Grain Markets

Earth’s Accelerating Spin: How Melting Poles Impact Natural Gas and Grain Markets

by Jim Roemer – Meteorologist – Commodity Trading Advisor – Principal, Best Weather Inc. & Climate Predict – Publisher, Weather Wealth Newsletter 

  •  Thursday Evening Weekend Report – March 28-31, 2024  
Screenshot 2024-03-28 at 10.56.42 AM.png

Worried about losing one second of time? The melting Polar Vortex is not only creating more and more of a warming planet, but is also speeding up the Earth. 

My video (above) addresses how I predicted another warm winter, the collapse in natural gas prices and which analog years might be helpful to predict summer grain markets and crops. Enjoy!

Anyway, in the next couple of years, we’ll all lose one second from our day. It may not seem like much, but this tiny adjustment to our clocks is being impacted by the massive melting of polar ice due to climate change.

The length of our days is determined by the Earth’s rotation speed. As that spin gradually changes based on shifts in the planet’s surface and molten core, we occasionally need to add or subtract a “leap second” to stay in sync.

Source: NOAA

  • While we’ve added plenty of extra seconds over time as the rotation slowed, the Earth is now speeding up again. For the first time ever, we’ll need to remove a second instead of adding one. But, the unprecedented removal could create unforeseen issues for computing systems used to only adding time.
  • The kicker? This leap second subtraction was originally forecasted for 2026, based on the accelerating spin. However, the study shows the melting ice caps are enough to delay that milestone day of lost time all the way until 2029. A tiny difference, but one more stark reminder of the profound impact human-caused global warming has on the fundamental systems that govern our world.
  • In just a couple years, we’ll actually need to remove a second from our clocks – something that’s never been done before. And the surprising reason? Human-caused polar ice melt.
  • While the slowing effect of tides has dominated Earth’s rotation changes historically, the melting ice sheets are now a major factor speeding up our planet’s spin. As that ice shifts from the poles towards the equator, it’s causing the entire Earth to rotate faster, like a figure skater pulling in their arms.
  • However, another force in the planet’s core is outweighing even the ice melt acceleration right now. We don’t fully understand these mysterious core processes 1,800 miles below, but they are inexplicably spinning up the solid outer shell independent of the liquid core’s motion.
  • The net result is an increasingly sped-up rotation requiring that unprecedented “leap second” subtraction soon, (likely in 2026)  according to the study. It’s a seemingly minuscule adjustment, but one with huge implications for things like stock exchanges and computing systems only designed to add time, never remove it.
  • To me, it’s simply astounding that human activities like burning fossil fuels have now measurably altered something as fundamental as the literal spin of our entire planet on its axis. A stark reminder of our growing impacts.
  • When it comes to commodities, One of the impacts has of course been the collapse in natural gas prices once again. Selling natural gas in the fall and getting out in the early spring has worked “almost every time” the last few years. My Spider, which was firmly bearish at a -8 back in December, is a bit more neutral now at these prices, but I see nothing to get excited about in this market given such massive global supplies

As we head towards the spring and summer weather markets in grains and soft commodities, find out how to trade better, get a jump ahead of other weather forecast firms, with a 2-week free trial period to WeatherWealth, here:

Unusual Weather and Commodity Price Forecasting

Unusual Weather and Commodity Price Forecasting

HIGHLIGHTS of the above video include:

  • African dust, the Harmattan Wind, and how I called the unprecedented explosion in cocoa prices three weeks ago.
  • Why El Niño has strengthened recently: Potential impacts for grain prices and the Midwest summer
  • Why record-warm global oceans have thwarted any bull move in natural gas prices  
  • A look at potential late February and March weather

Join farmers, traders, and investors on six continents who have benefited from a seasoned meteorologist’s 38 years of experience as he second-guesses standard computer models. What is the next big trade in Ag commodities? Is it too late to buy cocoa and go short the grains?

Feel free to request a 2-week complimentary subscription to WeatherWealth here (if you’ve not already had one):

My most recent big trade, which potentially pays for a subscription to my newsletter for 3-4 years in a matter of 2 weeks!! was in cocoa.

Stratospheric Warming & How It Could Change Global Weather Patterns For Commodities?

Stratospheric Warming & How It Could Change Global Weather Patterns For Commodities?

Click on this video below to hear about how stratospheric warming may affect the natural gas, cocoa, soybean and coffee markets in January


Join farmers, ETF and commodity traders around the world: Sign up for a free trial to the “only” all weather-commodity newsletter that gives specific trading ideas (cancel anytime)

What is the MJO? How does it work in conjunction with El Niño to affect commodity markets?

What is the MJO? How does it work in conjunction with El Niño to affect commodity markets?

In this video (click above), I discuss the MJO index and how we use it as a weather forecasting tool in conjunction with El Niño: 

  • Where the MJO will move to, and if it will influence the outcome of northern Brazil’s soybean drought; 
  • the potential for a colder outlook in U.S. natural gas heating demand areas; and 
  • a continuation of disease issues for West African cocoa.

While Equatorial Pacific Ocean temperatures are very warm suggesting strong El Niño conditions, other variables do not justify El Niño being more than weak-to-moderate.

For example, the MEI index (above) is a better representation of how strong El Niño is. This takes into account global atmospheric angular momentum GLAAM), and the SOI index and is also influenced by the progression and strength of the MJO.  

Feel free to download a complimentary issue of one of my full WeatherWealth reports with recent trade ideas here and how we forecast longer-range weather for farmers and traders on six continents.

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