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
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.
See my video above about how record warm oceans, brought on by El Niño and climate change are hurting West African cocoa crops
I wanted to provide you with insights into how high cocoa prices impact various equities, companies, and industries within the market. Understanding these dynamics can be essential for informed decision-making.
West Africa produces 70% of the world’s cocoa which is turned into Chocolate.
I mainly follow commodities but you may want to look into these equities. It has remainedvery wet with disease issues in parts of West Africa since summer and now some potential harvest delays. This is a major crop-impacting issue for cocoa and something I have been worried about and forecasting since June.
So how do you trade cocoa and other commodities based on the weather? Find out here.(click below)
Below is a list of some of the industries that can be affected by higher cocoa prices.
Chocolate Manufacturers – Companies like Hershey (HSY), Mars, Mondelez (MDLZ), Ferrero, and Nestle (NSRGY) are directly affected by high cocoa prices as they face increased input costs, which can put pressure on their profit margins.
Cocoa Processing Companies – Businesses like Cargill, Barry Callebaut, Blommer Chocolate, and Touton play a critical role in processing raw cocoa into ingredients for food companies. They, too, are impacted by the price fluctuations in cocoa.
Confectioners – Lindt, Godiva, Russell Stover, and Ghirardelli face higher costs for key ingredients, impacting the production of their confectionery products.
Bakeries – Companies such as Krispy Kreme (DNUT), Panera Bread (PNRA), and Dunkin Brands (DNKN) are affected as high cocoa prices influence the costs associated with cocoa-based products.
Frozen Desserts – Businesses like Unilever (UL), Nestle, and Blue Bell, known for their ice cream products, must contend with cocoa butter and cocoa powder price fluctuations.
Retailers – Giants like Walmart (WMT), Kroger (KR), and Costco (COST) may need to decide whether to absorb higher prices themselves or pass the increased costs on to consumers.
Cocoa Growers & Traders – Companies like Hershey, Cargill, Barry Callebaut, and Olam (OLAM: SP) are crucial in sourcing raw cocoa globally, and they experience the direct impact of cocoa price movements.
Cocoa ETFs – Notably, exchange-traded funds (ETFs) like NIB, used to track cocoa futures prices, and CHOC, which invests in cocoa companies, provide investment opportunities tied to the cocoa market. However, the ETF was retired last June.
In summary, rising cocoa prices have a cascading effect. While they can boost revenue for global cocoa suppliers and traders, they often squeeze the profit margins of manufacturers in the chocolate business, who probably constitute the hardest-hit links in the chain.
Homes and cars are damaged, fields of crops flattened and hundreds of thousands are without power after a derecho raced across parts of the Midwest Thursday.
The line of severe thunderstorms roared across the region with winds that gusted up to 90 mph.
Please click on the image below to see Jim Roemer’s video about the major squall line that brought the first rains in weeks to much of Illinois and other areas of the central and eastern corn belt
This Dercho is fresh on the minds of Iowans with major damage back in August 2020. Hopefully, this time, drought-easing rains will offset in most areas, major crop damage.
Net, net over the next 2 weeks, drought-easing rains will prevent the 2023 corn and soybean crop from being a disaster due to the drought.
HELPING YOU MAKE THE BEST INVESTMENT DECISIONS BASED ON THE WEATHER
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