Seasonal Impacts of Hurricanes on U.S. Commodity Markets

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Seasonal Impacts of Hurricanes on U.S. Commodity Markets

July 30, 2009
By: Jordanna Sheermohamed, M.S. Meteorology
Weather and Climate Consultant for MB Wealth Corp.

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How weather affects daily lives is something that has fascinated individuals from various facets of our society for hundreds of years. From the clothes we wear on a daily basis to major preparations made on behalf of the global agricultural industries, weather, and more specifically climatic impacting factors, are nothing to be ignored.

This cannot be stressed enough when referencing the global hurricane seasons which tend to wreak havoc on agriculture areas worldwide on an annual basis. The safety of our populations and industries rely on the joint efforts of leading nations worldwide to share both information and knowledge of past and current climate and weather data. The U.S. Department of Commerce houses several facilities under the National Oceanic and Atmospheric Administration (NOAA), which produce and provide daily, monthly, and seasonal outlook forecasts of temperature and precipitation, just to name a few.

Although not limited to, several factors to weigh when considering the weather and/or climate in a given region would include the Pacific Decadal Oscillation (PDO), the current state of the Southern Oscillation (SO), and of course the annual ominous hurricane season.

The PDO is a decadal variability in climate that occurs roughly every 20-30 years. Affects of the PDO span the entire Pacific Ocean altering both wind patterns and sea surface temperatures. Although PDO forecasts have only gained notoriety as late as 1994, the current phase indicates negative anomalies or a “cold phase”, which exhibits warmer water temperatures in the Northern, Western, and Southern regions of the Pacific ocean, and cooler temperatures in the Eastern and Central Pacific ocean. Although the PDO can be considered a “large-scale” indicator of sea surface temperatures and wind patterns, modest time scales play just as an important role in global climate forecasting.

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While seasonal trends may potentially impact supply and demand in certain commodities, seasonal aspects of supply and demand have been factored into futures & options market pricing.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions. Calculations of profit and loss have not factored in commissions and fees.

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One Comment on "Seasonal Impacts of Hurricanes on U.S. Commodity Markets"

  1. The G Manifesto
    Checkers
    03/08/2009 at 2:13 am Permalink

    MPM,

    talking of weather phenomenon, whats your take on global warming? a distaster like the “scientists” predict or a money spinning hoax for Al Gore?

    checkers

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