BamNegQBOLowSolar

Weather Buzz: Winter Roots Taking Hold?

I feel as though I need to begin every forward-looking weather related post with the following caveats:

1. I am not a meteorologist. I pay attention to a lot of them & try to decipher what they say
2. Winter is still a long ways off
3. Due to #2, DO NOT bank on things you hear or read in the summer pursuant to the upcoming winter

With that out of the way…let’s get on with it. As a reference, I will refer to meteorologists as ‘mets’ on occasion in this post.

I have been bookmarking several items of interest from meteorologists I follow over the past week and I must say the breadcrumbs are ‘good’…as in you’d rather see positive winter harbingers than negative winter harbingers.

Let’s get to some of what I have collected…

What they mean by ‘low solar’ is fewer sunspots than normal, and a trajectory where they keep getting lower and lower year after year over the span of a roughly 11-year minimum and maximum cycle…and some maximums are ‘grand maximums’ and some minimums are ‘grand minimums’. I have seen more than a few mets beginning to discuss such observations and their potential on our climate. The last minimum cycle bottomed out in 2008-2010. Those were cold winters and also involved two of the four largest grain drying years since 2003.

The color shaded map is a December through February analog blend using the winters of 2008-2009 and 2009-2010. We’d all sign up for that right now.

This means that as of right now, there is not any El Nino or La Nina in the cards to influence our winter this year…at least not right now and those factors are not expected to manifest this winter.

As many of you know, the last few days of July and the start of August have yielded some below normal to well below normal temps across the eastern two-thirds of the United States. The forecast for the next two weeks is for that below normal period to continue.

The QBO…what is it? “The Quasi-Biennial Oscillation (QBO) is a measure of stratospheric winds over the tropics.” That is from MDA, a commercial weather service, from their update just this morning…the QBO is being discussed quite a bit right now in meteorological circles. More from MDA today:

“..after an uncharacteristic blip in its normal trend a year ago, the signal returned to its negative phase back in June and has since declined further to a value of –10.48 m/s in its July report. Its negative phase represents stratospheric easterlies, and this phase has been linked to sudden stratospheric warming events and associated blocking regimes via the Arctic Oscillation during the winter season.”

If you have been reading my writings for at least one year, you will remember that sudden stratospheric warming events leads to a weakening of the polar vortex…which can lead to colder weather during North American winters. The QBO has been strongly negative as of late.

BAMWx has been spending a good deal of time delving into the -QBO factor and combining it with a ‘low solar’ period.

bam

They also posted a blend of analog years and the resulting winter temps:

BamNegQBOLowSolar

AGAIN….these are not forecasts, they are reference points to years and times where similar conditions were present and their resulting impact on weather. Or, I will let meteorologist Ben Noll say it for me:

Here are additional tweets that I find intriguing:

I like that disclaimer…it’s more official sounding than mine.

Translation: high latitude blocking = things you want for winter if you are in the propane industry.

This next image is from BAMWx. The map was their first crack at a September forecast, from back in July….the pink writing is what they are thinking now, one week into August, for the month of September:

BamSept

What they are depicting is they may be updating their September outlook to bring a below-normal look to the east and north of that pink line, and the BN stands for ‘below normal’. BAM has also been sounding their concerns for an early frost event sometime over the final week of August and into the first week of September, based on their observations. I have seen others talking and writing about this as well.

If we August remains below normal across much of the corn belt, and we would also have a colder than normal regime in September, even if we don’t see an early frost, some areas are going to have grain drying this year. The southern portion of Iowa as well as Nebraska and northeastern Illinois have been pretty parched, and yields are likely to be impacted. But some areas could see some considerable drying opportunities if September doesn’t torch on us.

Let me finish with a return to the MDA report from this morning. MDA has pretty much had two colors on their forecast maps for the better part of two years; orange and red…which means warm and warmer. And as much as I hate seeing such reports, they have been on the right side of many calls the past two years. They have had a few misses this spring, and certainly for August, as they had a blowtorch for this month for much of the country that is just not going to happen.

They had this to say about the present -QBO set up:

“Pushing those (-QB) analogs into winter shows a colder outcome with below normal temperatures across the Eastern Two-Thirds but a lack of a clear indication for the West. The bottom line is that the QBO may not have a major role on the pattern heading into the fall season but is perhaps a colder signal for the winter needing consideration as we put together our winter outlook in the coming weeks.”

These are strictly my words here, but when I see these guys starting to go here, what BAMWx has been saying this week among other mets, Gary Lezak from Weather2020 has been predicting a 40% chance of a colder than normal winter for well over a month now (which is actually a strong percentage)….it certainly gets the juice flowing.

OH BY THE WAY: On the propane trading side, and just minutes ago, there was a buyer willing to pay an $.0300/cpg fee with a strike price of $1.00 Mt Belvieu call option for the Dec-Jan time frame. The seller was at $.0350/cpg.

The deal got done, for 50,000/bbls….and the seller got his number.

Someone paid $.0350/cpg for a strike price that is nearly $.3000/cpg out of the money??? That’s 2.1M/gallons…or $73,500. That is one heck of an insurance premium…but someone feels like it may be worth it. I don’t think the weather chatter is spooking folks, but the inventory items we have been discussing could be…..can you imagine some grain drying and a colder than normal winter on top of those inventory issues?

If you have been in this industry any longer than four years, yes…yes, you can.

The buyer might also be worried about today’s news that we live in a world where an insane North Korean dictator can now equip his missiles with nuclear devices…

Anyway you slice it, some folks are literally betting real money on upside risk in propane

Jon Miller
Marketing Representative for NGL Supply Wholesale in Tulsa Oklahoma. Follow me on twitter @PropaneBuzz

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