This video pinpoints the climatic variables responsible for the coldest U.S. weather in years. Frequent snowstorms will also occur. The good news is that some easing of the cold will occur by late January.
A negative NAO index has to do with a warm block near Greenland. (please watch my video —it explains how this is affecting commodities)
SNOWFALL PROJECTIONS NEXT 2 WEEKS (INCHES): A negative NAO will bring many areas in red and white over 1-2 feet of snow from at least 2 major storms. The most snowfall in several years
The opposite is happening over the South Pole (Antarctica), there has been a positive AAO index. This means the vortex stays put and does not move north. Combined with El Niño, this has brought improved weather for South American soybeans, something I alerted all my WeatherWealth subscribers about, three weeks ago.
Only 4 or 5 El Niño events have seen a powerful negative NAO index in January. Most of these years saw El Niño weaken by the spring or summer. Based on this scenario, this will be very important for many agricultural markets, and I will be developing trading strategies in options, futures, and ETFs.
How a negative NAO (warm block over Greenland that forces the Polar Vortex south) affects commodities:
1)Energy/Natural Gas: Coldest weather in at least 2-3 winters coming for Europe and the U.S. starting next week
2) Wheat: Isolated areas of winterkill in Russia and possibly Nebraska and big cold and snows for the southern Plains and Midwest. It will be important to monitor snowfall.
3) Cocoa: While I was bullish all summer and autumn long on major wet weather and disease issues, the lack of a Harmattan Wind in Ivory Coast and Ghana could prevent any further damage to the cocoa crop
How does a positive AAO index (The vortex that remains over Antarctica and does not move north) affect commodities?
1) Soybeans/Corn: Easing of the northern Brazil drought and potential big Argentina crops
2) Coffee: A hot November and early December likely will lower Brazil’s coffee production by several million bags, but improved rainfall is on the horizon that will stop further damage.
Join farmers and traders worldwide who want an advantage in trading agricultural and energy futures with over 100 issues a year of WeatherWealth with frequent weather updates and trading ideas. Download a recent complimentary issue here about El Nino https://www.bestweatherinc.com/new-membership-options/
This free report below was written three weeks ago before we changed the weather forecast for natural gas and energy markets)
After a massive sell-off in natural gas prices the last few weeks on a warm late fall and huge production, the NAO turning negative may offer some colder, snowier risks for the eastern third of the U.S. But, is it enough to warrant a major rally in natural gas futures?
Overall, however, our WeatherWealth newsletter has been bearish natural gas for more than a month, helping clients to potentially capitalize on various options and future strategies.