Trade Winds Daily Service gives you the mid-range and immediate weather forecasts for the world's major crop-growing and energy using regions.
Mid-range and immediate weather forecasts for the world's major crop-growing and energy using regions.
Long range weather forecasts for the world's major crop growing and energy using regions.
Practical how-to guides for weather-related commodity trading.
Commodity market week in review.
Weather maps and forecasts effecting commodity markets.
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Weather derivatives based on reliable long-range forecasting

Trade Winds provides accurate seasonal forecasts which are a must for weather derivatives.

Markets Glossary

long range weather commodity
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grain
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soybean
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cotton
cocoa
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orange juice
natural gas
heating oil

For more information on Daily Services or the Trade Winds Newsletter please contact:
Craig Solberg.

Trade Winds
2411 Grand Avenue
Des Moines, Iowa
50312-1111
800-747-2471

Weather Trades, Inc. is division of Freese-Notis Weather.

The Source for Grain and Energy Markets

Weather Derivatives


Long Range Weather Forecast subscription access

Economists believe that 70% of the U.S. economy is vulnerable to abnormal weather patterns. Up until very recently, businesses that were particularly sensitive to weather uncertainties had very few options to choose from with regards to hedging weather risk. This situation has begun to change though due to the development of weather derivatives.

Weather derivatives allow businesses sensitive to the vagaries of weather to protect themselves against changes in costs and sales linked to variations in climate. These financial instruments gained in popularity during the winter of 1998/99 due to long-range forecasts calling for warmer than normal weather during that period (due to the onset of El Nino).

Weather derivatives can theoretically be designed for almost any weather variable (rain, snow, wind, etc.), though most of the activity so far has centered around long-range (seasonal) temperature forecasts. Forecasts provided in Trade Winds newsletter are of great interest to those companies involved in weather derivatives transactions.

Below is an example of weather information that is used in weather derivatives transactions. Such information can be designed for most any area of the United States. Please contact Harvey Freese for more information on weather data that we can provide and the cost structure for subscriptions.

1. Based on CAT simulation model interpretaion of NOAA 30 and 90 day Probability forecasts

Heating dd
  Feb Mar Total/Net
Temp/Precip Forecast +7% /CL +3% /-3%  
Estimated DD 458 251 709
Standard Deviation 145 118 177
90% CL -Lower 145 118 177
90% CL -Upper 620 457 926

Prob of exceeding:
700 725 750 775 800 825 850 875 900 925dd
51 46 41 36 29 26 21 14 14 11

2. Based on the regression model Interpertation of Freese Notis Temperture forecasts

Heating dd
  Feb Mar Total/Net
Temp/Precip Forecast +3F +1F  
Estimated DD 414 246 660
Standard Deviation (sub) 120 75 186
90% CL -Lower 194 109 320
90% CL -Upper 634 383 1000

Prob of exceeding:
700 725 750 775 800 825 850 875 900 925dd
42 36 32 27 23 22 15 12 10 8%

3. Based on NOAA/NCDC 30-year normals (1961-90)

  Feb Mar Total/Net
Estimated HDD 484 286 770
Standard Deviation 117 95 174
90% CL-Lower 291 129 484
90% CL-Upper 677 433 1056

Prob of exceeding:
700 725 750 775 800 825 850 875 900 925dd
66 60 54 49 43 38 32 27 23 19%

4.Based in the past 10 years (1988-97)

  Feb Mar Total/Net
Estimated HDD 414 263 677
Standard Deviation 104 61 140
90% CL-Lower 233 152 420
90% CL-Upper 604 373 933

Prob of exceeding:
700 725 750 775 800 825 850 875 900 925dd
44 37 30 24 19 15 11 8 6 4%

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