Why even with a weak La Niña, have coffee, cocoa, and sugar prices soared?

Why even with a weak La Niña, have coffee, cocoa, and sugar prices soared?

(KCH25) (RMH25) (CCH25) (CAH25) (SBH25) (CANE) 


Below are excerpts from my recent WeatherWealth newsletter. Many agricultural commodities are breaking out to the upside and the weather is definitely a key reason. In contrast, warmer U.S. weather returning and worries over a potential increase in domestic oil production, combined with trade tariff concerns have pressured energy markets again. 

The new bull market in many agricultural commodities could add to inflation worries once again

– Enjoy–Jim Roemer (meteorologist/commodity trading advisor)

 

Why are coffee prices soaring? 

It was these wilting trees in 2024 that have now resulted in recent crop survey tours with many analysts lowering their 2025-2026 Brazilian crop by another 5-10%.

Improved October rainfall kept the situation from being even more of a disaster. Nevertheless, coffee stocks continue to fall and the charts are very bullish.

In addition, a stronger Brazilian Real results in farmers holding back on sales of commodities such as coffee, soybeans and sugar.

Going forward, the big question for the coffee market is “How will a weak La Niña event (or neutral situation) affect production in Vietnam, Colombia and Brazil, deeper into 2025-2026?” I will have studies later on. of course.

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Nevertheless, due to Theta (time decay) for certain coffee option strike prices, we suggested call option strategies that were potentially profitable for those WeatherWealth clients who took our advice two months ago.
 


Why cocoa prices have higher to go, even at these historical levels


One of our most successful recent trade suggestions to WeatherWealth clients has been in cocoa. Prices have now soared more than $11,000 a contract in two weeks on growing new concerns for the 2025 West African mid-crop, but also potentially for the main crop. The crop problems never end in West Africa. In my opinion, this is brought on more by climate change than by El Niño or La Niña events.

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My in house teleconnection program looks at weather signals thousands of miles away to second guess standard computer models.

Typically with a weak La Niña (negative MEI index), we can see a wet signal for West African cocoa (+3.45).


 However, notice that a total of six of the most important climatic variables I look at above (Indian Dipole and record warm ocean temperatures in the Atlantic and near West Africa) are all dry signals (negative values). One combines all of these and we can see that humidity levels and rainfall will remain below normal, thus hurting more of the cocoa crop.


Why, In The
Face Of A Bear Market In Sugar, We Reversed Our Attitude

Other than the Brazilian Real breaking out technically that can often help sugar and coffee prices, new weather problems in Australia from harvest delays and a lower crop in Thailand, as well as in India, helped sugar prices rally 10% off their lows.


We caught wind of this around January 21st and advised subscribers to our WeatherWealth newsletter that I was no longer bearish and to look for potential buying opportunities. 

Is it too late to buy sugar now. Is this old news? That’s where our newsletter comes in handy for many markets. We also issue “Weather Spiders” each week for all markets.

Sources: A Real Sugar Expert & WeatherWealth Newsletter

Learn how to trade commodities successfully based on weather, the commitment of traders, technical analysis and other signals. Join farmers, traders, agribusinesses, natural gas producers and ETF enthusiasts around the world who want to benefit from more accurate weather information and timely trading strategies. 

Feel free (if you have not already) to request a free two-week trial period here: https://www.bestweatherinc.com/membership-sign-up/

 

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.
 

(video) How weather  created a bear market in corn & soybeans, while the Brazil drought threatens soft commodities

(video) How weather created a bear market in corn & soybeans, while the Brazil drought threatens soft commodities

Jim Roemer – Fri Aug 23, 5:12PM CDT

Charts, tickers, traders - Business chart with glowing arrows and world map by Golden Dayz via Shutterstock

(ZSX24) (ZCZ24) (ZWZ24) (SOYB) (CORN) (WEAT) (KCZ24) (CCZ24) (SBV24) (CANE) (TAGS) (DBA) 

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

  • Weekend Report – August 23-25, 2024

To View Video  > > > > >   PLEASE   CLICK   BELOW

In this video, I talk about:

  • Why La Niña did not form this summer and how I predicted the bear market in grains last June
  • BestWeather Spiders: What are they and how to use them to trade everything from soybeans to coffee
  • Global Atmospheric Angular Momentum is finally turning negative: How this resulted in some short-term heat and dryness in parts of the Midwest grain belt. Will it last?
  • Northern Brazil’s drought and how it may affect OJ, sugar, and coffee production and prices.
  • West African dry weather is helping the cocoa market again. What’s in store, weatherwise?


Download a PAST complimentary issue of WeatherWealth here. https://www.bestweatherinc.com/new-membership-options/

See how we predicted $9.50 soybean prices and sub $4.00 corn, 2-3 months ago, what’s ahead for soft commodities, and more. You can also receive a 2-week free trial period

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. 

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.

The active sun, lingering El Niño & summer corn belt weather

The active sun, lingering El Niño & summer corn belt weather

                                                

         

                                                                                               

Jim Roemer

Extreme heat in much of the deep south and west is beginning to create a new bull market in natural gas, but what about corn and soybeans?  Right now, my biggest concern is for flooding in the NW corn belt that may mean a switch from some corn to soybean acreage. The potential also exists for some heat heading into July.

Back in April, our forecast for drought-easing Midwest rains, combined with terrible demand, helped pressure grains sharply. This collapse may be surprising in the face of lower and lower Russian wheat crop yields and damaged South American corn and soybean production. However, it will take consistent heat and dryness later to foster a new bull market in corn and soybeans.

Could this happen? Perhaps. In my view, occasional weak El Niño conditions are holding on. I predict a hot July for parts of the Midwest corn belt based on what I’m seeing about the global climate, as per the maps below.   The key factors are record flood levels coming to Florida combined with a warm signal from a  NINO4 and a negative PDO.

1) Solar Activity:

My point of view :  T h e r e    is    z e r o    c o r r e l a t i o n     b e t w e e n    s u n s p o t    c y c l e s    a n d     gl o b a l    w e a t h e r. 

Perhaps, 50-100 years ago that might have been the case… but not today, with record global ocean warming brought on by man-made influences. Do you think that all of these record-warm years are cyclical and due to the sun? Guess again… NO!  The chart below shows how the planet has warmed since the 1880s whether solar activity (yellow line) was high or low.

2) Similar teleconnections and a look at July rainfall trends


The negative PDO in the Pacific, along with warming and an El Niño signal east of Australia (NINO4 region), combined with cooling near Peru (La Niña signal) has only happened simultaneously in two years since 1950. Depending on how these teleconnections fluctuate in the next few weeks, may result in a dry July in parts of the corn belt and take the bearishness out of the grain market.


 3) Signs El Niño/La Niña conditions are going back and forth

Volatile global weather patterns have  N O T H I N G  to do with solar cycles but everything to do with record-warm global oceans and the oscillation of El Niño/La Niña among other teleconnections.

My program is available for all WeatherWealth subscribers. The purpose is to apply weather forecasts to predictions about market trends for agricultural and energy commodities.

Shown below are the incredible rains that hit Florida: more typical of El Niño lingering than La Niña

Will we enter a new bull market in corn and soybeans? For natural gas, we became bullish last week. Please feel free to download a recent complimentary sample issue of our newsletter here, or join farmers and traders around the world who want a much better edge trading commodities on the weather, with a 2-week free trial to WeatherWealth

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’s currently driving sugar prices to new highs?

What’s currently driving sugar prices to new highs?

The El Nino-driven bull market in sugar began last spring. Prices have soared more than 30% because of a combination of drought in India and Thailand, and higher crude oil prices. This price surge is more than any other agricultural commodity.

Currently, as my weather maps show, heavy rains hitting Brazil and Thailand will delay their harvest. This may add to the “squeeze situation” occurring in this market.

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My Best Weather spider is in the “cautiously” bullish camp in sugar. We look at all fundamentals, technicals as well as trader psychology from natural gas to grains and all soft commodities. Feel free to receive a 2-week TRIAL period to WeatherWealth.

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