SOURCE: Storm Exchange

November 11, 2008 11:56 ET

Storm Exchange Releases November 2008 Agriculture and Retail Weather Risk Outlook

Corn and Soybean Yields Remain Below Trend; Cooler Regional Weather to Help Retail Sales

NEW YORK, NY--(Marketwire - November 11, 2008) - Storm Exchange, Inc., a market leader in weather risk management services, today released its November 2008 Weather Risk Outlook, a 90-day projection of the impacts of the weather on businesses in the agriculture and retail markets. Based on a combination of atmospheric climate trends, advanced computer-driven seasonal prediction models and analog forecasts, these monthly forecasts provide businesses with probabilities of adverse weather conditions on a regional basis.

Agriculture Weather Risk

The Storm Exchange corn yield estimate now stands at 146.5 bushels per acre. This yield forecast is two bushels higher than the company's forecast last month, due primarily to improved late-summer growing conditions and optimal September rainfall, which improved the outlook for slow maturing crops. However, the outlook still calls for 5% reduced yield per acre compared to the historical trend. This forecast stands in sharp contrast to the USDA's October prediction of 153.9 bushels per acre. Storm Exchange attributes the projected below-trend shortfall to delayed planting across the Corn Belt and June flooding that stunted corn and produced nitrogen deficiencies.

     Corn:  The corn harvest is now two to three weeks behind schedule
     for farms west of the Mississippi River.  To date, only 55% of US
     corn has been harvested, making this the second slowest harvest in
     the last 25 years. Compounding the problem, a wind storm in late
     October and early November produced significant damage in the
     Dakotas, Iowa and Nebraska. Stalks weakened by heavy rain and wind
     topple over in high winds making efficient harvesting difficult, if
     not impossible.

     Soy:  Soybeans were planted late into wet fields and never caught up
     developmentally.  A delayed pod set, coupled with a cool, dry August
     reduced the size of soybean seeds.  Pod filling was inadequate in the
     northern states especially where time ran out to enlarge seeds.  Storm
     Exchange projects a 7% cut below trend in soybean yield this year, in
     line with USDA projections.

"With the harvest already weeks behind schedule and adverse weather rearing its head again, we are not optimistic about corn or soybean yields this year," said Gail Martell, Storm Exchange Senior Agriculture Analyst. "There was simply not enough time left for kernel and pod-filling to make up for delayed planting dates and coolness."

Retail Weather Risk

A continued dip in temperatures across the Midwest could help bolster retail sales in the face of continued turmoil in the consumer sector. Though macroeconomic trends historically trump the weather as a driver of November/December retail sales, Storm Exchange projects that the apparel category may receive a marginal weather-driven boost this year. Below-average temperature dips will continue in the Southeast in December, followed by a nationwide freeze in January that could help unleash pent up demand and provide some cover to retailers looking to sell off-season inventory.

"Early indications are that the cool early October weather helped buttress otherwise floundering retail sales in an extremely challenging economic environment," explained Jordan Rizzuto, Storm Exchange's Vice President and Senior Economic Analyst. "Regionally, we could see this trend continue throughout November and into December for specialty apparel and seasonal products, but we may have to look ahead to January to see another significant boost stemming from off-season discounts and inventory clearance."

About Storm Exchange, Inc.

Storm Exchange provides weather-related financial and information services in the language that corporations and investors understand best: the bottom line.

Storm Exchange helps corporations improve performance by enabling them to identify, measure, manage and hedge the impact of weather on income and expenses. For investors, traders and insurers, the company delivers information solutions that enable them to understand and anticipate how weather impacts financial performance.

Storm Exchange solutions focus on the business context and financial relevance behind the weather. Services include media, industry-specific intelligence, correlation models, proprietary analytics, forecasting tools, and weather hedge solutions. These services, many of which are available on leading information platforms such as Bloomberg, address the fundamental drivers of financial performance that result from exposures to precipitation, wind, temperature and other climate variables.

Storm Exchange is headquartered in New York and operates a weather research center in State College, PA. The company is backed by leading private equity investors Venrock Associates and RRE Ventures.

Contact Information

  • CONTACT:
    John Roderick
    J. Roderick, Inc.
    Email Contact
    631.656.9736

Webosphere

Keyword Cloud

View Website