Weather driving myriad market factors
The latest Arctic blast has culminated in rare winter snows across portions of the Southeast and Gulf Coast. National snow cover is now up to 42.1% (vs. 31.2% last month), with some areas as far south as northwestern Florida now with a thicker snowpack than the western Midwest and east/central Plains. The upper-level ridge of misfortune across the West Coast is finally beginnning to break down this morning as several shortwave troughs, or energy packets, weaken the integrity of the upper-level flow.
This will result in a pattern change for the Rockies and West Coast over the next five days as a few systems work their way in from the East Pacific. This wet pattern will be shortlived, however, with indications of a shift in wetter-than-normal weather to the southern Plains and Southeast, where European ensembles indicate above-normal precipitation for the six- to 10-day period.
A weaker upper-level flow characterized by a fragmented jet stream will allow for several bundles of upper-level energy to intitiate low pressure development and precipitation from Texas east to the Carolinas, beginning late this week with two potential rainmakers for the southern U.S. next week.
Across the Midwest, a warmup today will be rather short-lived as a frontal boundary stalls across the extreme southern Midwest tomorrow through Friday, with some light snowfall chances across the western and central Midwest Thursday and Friday and some mixed precipitation/possibly plain rain possible across the Ohio Valley Saturday afternoon as this cold front finally exits the region. Upper-troughing will then dominate the pattern across the Central and Northern U.S. with below-normal temperatures likely to continue throughout the six- to 10- and 11- to 15-day periods.
Although the possiblity for another Arctic assault from the Polar Vortex appears low, colder weather will continue to foster above-normal natural gas drawdown, with underground storage already at a five-year low. Indications from our long-range models show gradual moderation across the western U.S. during the latter half of the 11- to 15-day period as ridging tries to reestablish itself across the West Coast, which may result in another dry pattern setting up for California.
Looking at our teleconnections, the NAO and MJO favor a warmer pattern across the U.S., which we know will not come to fruition for at least another two weeks. The AO also indicates a run at more positive values several days from now. These signs do point to some sort of moderation toward the latter half of February, but confidence remains quite low.
Looking at the futures market this morning, very little momentum is noted between corn, soybeans, and wheat, although natural gas is once again up to $5/mmbtu. Conflicting weather in SA, including better growing conditions for Argentina vs. worsening conditions for Brazil, are likely to offer some tug of war between bullish and bearish signals. For winter wheat, a lack of any imminent winterkill threat may diminish support to some extent, although other export-driven factors will inevitably come to play.