Swings in the weather forecasts have caused equally volatile natural gas futures. It was so cold in Alberta earlier in January that natural gas wells froze up! Last week, frigid air and winter storm blasted the southern United States. See the cold week in the temperature anomalies below:
CREDIT NOAA / ESRL
Despite this, (and the fact that natural gas storage is 362 Bcf below the five-year average of 2,946 Bcf) natural gas prices are falling on the warmer outlook currently presented by the models. Our longer range outlook has verified, so far. We will be watching the maps closely as we head into February. For more information on our forecasts and subscriptions, email email@example.com
Corn and Soybeans
There have also been some global weather for grains in both the northern and southern hemispheres. Dry and hot conditions struck Argentina beginning in December. The lack of relief has begun to worry traders, who were initially expecting a decent crop. South Africa has been suffering from dry weather as well, impacting corn crop conditions. See the POL index we’ve talked about before. A strong signal of dryness in these areas is present. There are indications that the corn crop in Argentina will be hit the worst, with a significant decrease in yields possible.
A little closer to home, a drought is developing in the plains. This is the typical pattern during a La Niña. Even though wheat is dormant during the winter, some moisture is needed by the spring.