“Natural gas weather volatility and the return of the Harmattan Wind for cocoa crops"
by Jim Roemer - Meteorologist - Commodity Trading Advisor - Principal, Best Weather Inc. & Climate Predict - Publisher, Weather Wealth Newsletter
January 24, 2024
The Harmattan is a dry and dusty northeasterly trade wind. It blows over West Africa (including Ivory Coast and Ghana) during the winter months, typically from November to March. The presence of the Harmattan can lead to low humidity levels and cooler temperatures in the affected regions. A return to these conditions in West Africa, combined with incredibly tight cocoa stocks brought on by previous wet weather and disease concerns have helped the cocoa futures market become the “Leader of the Pack” as the top price-gaining commodity (see the red line).
Source: Market Screener
Dewpoints are generally low during the Harmattan season due to the dry and dusty air mass. Dewpoint is the temperature at which air becomes saturated with moisture, leading to the formation of dew. During this phenomenon, the dry air inhibits significant moisture content, and dewpoints can be quite low. While specific dewpoint values can vary, it's not uncommon for dewpoints to drop to very low levels throughout the Harmattan season, sometimes reaching single digits or even below zero degrees Celsius (32 degrees Fahrenheit). This indicates extremely dry air, and the low humidity levels can contribute to the parched and dusty conditions associated with the Harmattan. Notice the dewpoints next week in West Africa.
Source: WindyTV
When there is an El Niño and we also have what we call a positive Arctic Oscillation Index (+AO), this strengthens the west African Harmattan.
The Natural Gas “side of the coin”…
The positive AO index will also lead to a warm February for most global natural gas areas, something we advised our newsletter clients about early last week, in the face of major buying panic from the Polar Vortex. Traders potentially sold into the major buying panic last week and made a home run on my advance warning about the warmer forecast. However, Thursday’s EIA should be bullish for natural gas, given all of this cold weather last week. Then what does a trader do after that? That is what we do in our WeatherWealth newsletter. Will it remain warm or will there be a pattern change later?
Temp departure last week should result in a friendly EIA on Thursday
So…
…what have been my investing strategies in grains, cocoa, coffee and of course natural gas? Find out how we caught most of the bullish move last summer in cocoa and without ETFs present, other ideas in how to trade this and other markets with a 2 week free trial to WeatherWealth here: https://www.bestweatherinc.com/new-membership-options/
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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.
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