Alternative Data

Weather Commodity Signals

A 7-day AI weather forecast for US commodity regions, delivered every Monday before market open.

Cold forecasts predict higher energy demand. The signal is statistically linked to that same week's commodity futures returns — no look-ahead.

4.66

CORN Sharpe Ratio (Out-of-Sample)

+0.444

Northeast Heating Degree Days → Heating Oil (3-Year Out-of-Sample)

Weekly

Cadence

Signal

7-day Northeast Heating Degree Day forecast anomaly, standardized

Validated commodities

Heating Oil (HO), RBOB Gasoline (RB), Crude Oil (CL), Corn (CORN) — winter months only (Nov–Mar)

Regions covered

7 commodity-producing regions

Out-of-Sample period tested

2021–2024 (154 weeks)

Primary Signal

Flagship

Northeast Heating Degree Day anomaly → Corn

When the AI model forecasts a colder-than-normal week in the US Northeast, Corn futures tend to rise. Cold winters elevate energy costs, which transmit into agricultural production — connecting a Monday weather forecast to a grain price signal before the market opens.

4.66

Sharpe Ratio (score=3, out-of-sample)

79%

Directional accuracy

Trades (out-of-sample, 154 weeks)

Northeast Heating Degree Day anomaly vs Heating Oil weekly return — out-of-sample winter weeks

NE HDD z-scoreHO return (%)

AI model 7-day Northeast Heating Degree Day anomaly (gold) vs Heating Oil Monday-to-Monday return (navy). 2021–2022 out-of-sample winter weeks. Signal available before market open — no look-ahead.

Why It Works

Cold weather → higher heating fuel demand → elevated energy prices → higher grain production costs. Each step is physically causal and statistically verified. The AI model's 7-day temperature forecast has r = +0.894 correlation with ERA5 reanalysis — translating high forecast accuracy into a commodity signal that arrives before Monday open.

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