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)
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
Mid-Week Advisory – August 7, 2024
In the coming weeks, I will have a special report about A.I. technology, weather forecasting, and commodity trading. You can sign up here to receive that and see a previous Weather Wealth report (from June), when I became bearish on corn and soybeans, based on my summer weather forecast for good Midwest crops and No La Niña.
So… how did we “out-forecast” all of the other weather firms and even some A.I. models that La Nina would not form this summer and that we would have a bear market in grains and excellent crops?
What most computer models miss is something we call “connecting the teleconnections.” The lion’s share of weather models uses ocean temperatures and local current conditions in thousands of cities to create algorithms that go into the European and GFS weather models. While these models have improved, thus allowing NOAA and many similar agencies to make fairly accurate weather forecasts, they often miss commodity weather more than two weeks in advance.
Teleconnections “connect” the dots between ocean temperatures and weather patterns thousands of miles away.
As you can see from my in-house program ClimatePredict (one of the few weather models in the world that incorporates teleconnections and historical weather trends), my prediction last April was that July was going to be great for most midwest corn and soybean crops. That will continue over 80% of the Midwest grain belt through August. Our one concern is the dryness for Kansas and wet weather delaying spring wheat harvesting in Russia.
My program has also been predicting improved global weather for sugar. soybeans, corn and potential cocoa crops going deeper into 2024 and 2025.
Anyway, at least two-thirds of the above-mentioned years that had many similar summer weather conditions in the Northern Hemisphere did not transition to La Nina until after October or not at all. Now, two to three months later, many models (such as the European) are not predicting that La Nina will form at all this year. How about that?
In addition, Warm ocean temperatures in the western Equatorial Pacific has resulted in the SOI (Southern Oscillation Index) being negative off and on this summer. This has cut down on the chance of La Nina, anytime soon.
This could have huge implications on commodities and possibly also suggest the hurricane season will NOT be as active as NOAA and many other services have been suggesting. Still, historic record warm ocean temperatures portend that one of two hurricanes later this fall could still explode into at least a cat 4.
Source: WeatherWealth newsletter
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.
As El Niño transitions to a neutral phase during the summer, sugar prices typically experience a downward trend due to several factors:
Improved weather conditions: The end of El Niño often leads to more favorable weather patterns for sugar-producing regions, particularly in major exporting countries like Brazil, India, and Thailand.
Increased production: With the return of normal weather patterns, sugar production tends to recover in countries affected by El Niño-induced droughts or excessive rainfall. This increased supply puts downward pressure on prices.
Market correction: Due to supply concerns, sugar prices often spike during El Niño years. As these concerns dissipate with the transition to neutral conditions, prices typically adjust downward to reflect the improved supply situation.
Stockpile replenishment: Countries and traders often take advantage of the improved production and lower prices to replenish their sugar inventories, which can temporarily support prices before leading to a more balanced market.
Other factors affecting sugar prices
It’s important to remember that sugar prices are not solely influenced by El Niño or La Niña alone. There are a few other factors that can play a big role:
Global demand: If people start consuming more or less sugar, or if the global economy shifts, it can impact sugar prices.
Government policies: The availability of sugar in the market can be affected by government policies, such as restrictions on sugar exports or changes to biofuel mandates.
Crop estimates: When new estimates are released about the expected production of major sugar producers, it can affect market sentiment and prices.
Crude oil prices: Higher crude oil prices can “sometimes” mean that Brazil producers convert more sugar cane to Ethanol to lower high energy cost risks. This lowers actually sugar cane production that can hit the market.
So, while prices generally tend to stabilize as El Niño ends, the exact changes in price can vary based on these other factors. I keep a close eye on weather patterns, production forecasts, and policy changes to predict where sugar prices might head next.
My Weather Spider helps gauge market direction for all ag markets and natural gas in my WeatherWealth newsletter.
Look at the Indian Monsoon and the recent weather in Thailand
Generally, normal rainfall for key India sugar cane areas and a bigger crop in Thailand this year, combined with the weaker Brazil Real are bearish for sugar prices.
India’s monsoon picking up has pressured sugar, as I suggested to Weather Wealth subscribers last week, and I have developed longer term option strategies for these clients.
Source: ClimatePredict: Jim Roemer’s long-range weather forecast software
Find out how we recently called for the collapse in grain prices with specific profitable options and futures strategies for farmers and traders on six continents.
What is our feeling about coffee prices from here?
How severe has the heat and dryness been in Brazil?
We will help you receive better weather forecasts and with trading ideas.
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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