“Weak La Niña finally forming: Here comes the Polar Vortex! & Have grain prices finally bottomed?”
by Jim Roemer - Meteorologist - Commodity Trading Advisor - Principal, Best Weather Inc. & Climate Predict - Publisher, Weather Wealth Newsletter
Christmas Eve Report - December 24, 2024
La Niña finally evolving?
An ozone hole over the Arctic can influence the formation or strength of La Niña indirectly through its impact on atmospheric circulation and stratospheric dynamics. For example, during the CP (Central Pacific) La Niña phase, reduced stratospheric ozone weakens vertical heat fluxes, stabilizing the polar vortex (PV) and decreasing sudden stratospheric warmings (SSWs), potentially intensifying La Niña conditions.
I will discuss more about the Ozone hole down the road, but there are presently much clearer signs that NOAA will officially announce the formation of a weak west based La Niña event sometime in the next few weeks.
The combination of cooler waters moving further west and the SOI index being more positive are key factors that will influence grain, soft commodity and natural gas weather and price movement over the next few months.
The Southern Oscillation Index (SOI) has been firmly positive now for several months. A positive SOI refers to low pressure around Darwin, Australia, and low pressure in the eastern Pacific near Tahiti. This too is a signal that La Niña is finally forming.
Natural gas market volatility & factors influencing the upcoming January Polar Vortex
One such weak La Niña event was in 1996. Notice the volatility in natural gas prices: A surge in prices into January and then a subsequent collapse before (or by) February as the cold weather modified.
Natural gas prices have been soaring on the recent cold weather and ideas that January will have its coldest start in years. Weaker demand this week has contributed to greater market volatility.
Source: WeatherWealth newsletter
Source: WeatherWealth Newsletter
In my recent issue of WeatherWealth, I address these four factors that will result in some of the coldest January weather coming in years:
That the stratospheric warming event will weaken the polar vortex allowing it to move south;
La Niña Modoki;
The largest ozone hole since the La Niña event of early 2011 that helped result in the coldest temperatures over the Arctic in nearly 14 years; and…
The MJO moving into a colder phase.
Argentina's corn and soybeans producing areas could turn hot and dry in January.
Heat and dryness during the key pollination period for the nation's corn is possible with a weak, west based La Niña.
An improving chart pattern and potential dryness could help prices rally through early 2025. Notice, however, the current general good conditions (blue) in key grain areas compared to the La Niña event of 2011 (right) when there was more crop stress and a bull market.
Will things deteriorate for Argentina? Will ethanol demand continue to improve? What about next spring and summer Midwest weather?
My Climate Predict program looks at teleconnections around the world from El Niño/La Niña to sea ice, what is happening over Antarctica, etc. etc. to predict weather, sometimes months in advance. This is available for all commodities in my WeatherWeather newsletter.
Will Midwestern dryness expand and be be an issue for corn, wheat, and/or soybean production in the spring or summer of 2025? Will La Niña remain? Subscribe here for a 2 week free trial. https://www.bestweatherinc.com/membership-sign-up/
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 commands a unique standing among advisors in the commodity risk management industry.
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