(OJX24) (CTZ24) (NGV24) (UNG) (BOIL) (KOLD) (GCZ24) (GLD) 

“Possible late September Florida hurricane commodity impacts & the India Monsoon and gold prices”

by Jim Roemer - Meteorologist - Commodity Trading Advisor - Principal, Best Weather Inc. & Climate Predict - Publisher, Weather Wealth Newsletter 

• Wednesday Report - September 18, 2024

Loop Current definition

• One of the fastest currents in the Atlantic, the Loop Current travels at speeds of approximately 0.8 m/s, and is typically about 800 m deep. The extent of this phenomenon's intrusion into the Gulf varies with eddies frequently breaking off when the current stretches far into the Gulf.
• The Loop Current is an area of warm water that travels up from the Caribbean, past the Yucatan Peninsula, and into the Gulf of Mexico. It is also known as the Florida Current as it flows through the Florida Strait, into the Gulf Stream, and heads north up the eastern coast of the U.S.
• The Gulf Loop is variable. Sometimes, the current barely enters the Gulf of Mexico before heading towards the Atlantic. At other times, it may travel nearly to the coast of Louisiana before swinging back towards the Florida Strait.

Source: Wikipedia

Notice the red (near record warmth) over the Southeastern Gulf of Mexico. If a storm forms here, the strong loop current could help form an intense hurricane later in September.

Click on the video  to see how the loop current has progressed.   https://www.youtube.com/watch?v=xpTezADjkxE

Record-warm Gulf waters have resulted in several major CAT 5 hurricanes since 2017

Record warm waters in the Gulf of Mexico have significantly contributed to the intensity and rapid intensification of hurricanes. Warmer ocean temperatures provide more heat and moisture, which are essential fuels for hurricanes. This additional energy allows storms to grow stronger and more quickly, a process known as rapid intensification

For instance, Hurricane Harvey in 2017 was fueled by record-high sea surface temperatures in the Gulf, leading to unprecedented rainfall and flooding when it stalled over Texas. Harvey created a major spike in the gasoline market.

 Similarly, the 2020-22 hurricane season saw a record number of rapidly intensifying storms due to unusually warm ocean temperatures.

A potential major hurricane in late September?

The impacts 

• OJ prices will rally in part due to Brazil’s drought, as well
• The cotton market is already reacting to the worsening U.S. crop. If the Southeast sees flooding, it would lower the crop further
• The natural gas market could react to late-September demand destruction

September 25th-26th major hurricane towards Florida?

(Source WeatherWealth newsletter): We provide Weather Spider trade sentiment like this in our WeatherWealth newsletter for Ag markets, natural gas and occasionally crude oil if there is a hurricane. Each criteria goes from a very bullish +6 to very bearish -6. Then we add them all together. See how we caught the bear market in cotton most of last spring and summer, but not a lower U.S. crop is potentially more bullish. Will a hurricane hit some key crop regions on September 27th? What are our trading strategies? See our WeatherWealth free trial link, below.

How the Indian Monsoon can sometimes affect gold demand and prices

The Indian monsoon season can impact gold prices in India in a number of ways, including: 

• Gold as a store of wealth: Many Indian farmers buy gold or gold jewelry as a way to store wealth, as they often don’t have access to bank accounts.
• Crop production: A good monsoon season (like this summer) can lead to increased farm production and income for farmers and laborers. This can lead to farmers buying gold with their earnings to create assets.
• Festival season: The end of the monsoon season and harvest marks the beginning of the festival season, which is a time when people buy gold.
• Wedding season: India’s peak wedding season is from October to December, which is when all the families of bridegrooms make what amounts to a massive purchase of gold for dowries.

The monsoon has a significant impact on rural demand in India, which accounts for 60% of gold consumption in the country. Obviously, Fed policy, what the dollar does, and war tensions have been attracting bulls to the gold market for months. However, according to MRCI (see image below), the recent seasonal tendency for gold futures is for the price to move lower into late September. 

The longer term charts appear to show an unrelenting upward trend, while shorter term traders may see a “toppy" formation, when a market has moved too far, and too quickly. Of course, gold is not usually the weather market that coffee futures and other agricultural product markets are in.

Any influence on gold prices stemming from potential robust buying by Indian citizens (motivated by the great 2024 Indian monsoon) would not occur until later in the 4th quarter. 

Learn how to use the power of weather to make better investment decisions in ETFs affected by climate, as well as futures and option strategies in grains, natural gas and soft commodities with a two week free trial, here  https://www.bestweatherinc.com/membership-sign-up/

Here are the headlines of some our  recent latest Weather Wealth report sent out over 100 times a year

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.

Trading futures and options involves a significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results.