Tuesday, November 01, 2011

Brrrr!

Over this past week-end The Northeast was hit by a Nor’easter snowstorm that affected over sixty million people.  Over three million were left without power.  Darkened and cold schools in the northeast took the first snow days, many setting records for the earliest-in-the-year snow days in history.  The snow is gone on Wall Street in New York, but the potential impact of the coming winter on commodity and stock valuation is just beginning to dawn on traders and analysts.

I went to a favored source to get the best weather forecast possible  -  the Farmers' Almanac.  They say “get ready for a wet, wild winter in 2012.”  Ugh!  Don’t we have enough of that sort of thing in the credit markets?

It also looks like traders in New York will not have snow as excuse to miss all the fun.  The Greater New York area is expected to be stormy and wet with above normal temperatures  -  that means very cold rain, but less snow.

Could we have more cattle on the market than usual?  Very cold temperatures accompanied by average snowfall, might bring a few cattle to market that would otherwise be left in feedlots. 
The Gulf Coast states are likely to get a drenching, but its seems the mild temperatures that are predicted for the region will not unduly impact the farming and animal husbandry sector.  Oil and gas is rarely impact by anything but the most extreme weather conditions.

West Coast crop production could be negative impacted by below normal precipitation expected in the winter 2012.  Apparently, the upper northwest is getting much of California’s rain.

All in all the shock of seeing snow on the ground in October may have set off unnecessary alarms.  The rest of the country  -  the places where weather really matters  -  appears more benign than suggested by Farmers’ Almanac editors.

No comments: