Weather Trading – 12.05.2021

Short-range (front months:1+2 and front Quarter)

Portfolio:

• 20 MW front quarter
• 60 MW front month

Weather-trading and hedging: short-range

(Trading will be done stepwise and per step, we need profit on each step and a confirmed WRM+PV/Jet analysis. If no profit awaits confirmation or close positions. Portfolio: 60 MW monthly (1-3) and 20 MW front quarter)

• Q3-too risky going short/bearish more than few days per trade
• If bearish, front month…
• Week 19
  • Profit-taking Q3 2021
  • Sell June – verification already on Friday
  • Friday, evaluate WRM-CWW/MJO/PV/Jet response
  • If CWW, then sell more June
• Week 20
  • Risk for bearish start
  • Evaluate WRM-CWW/MJO/PV/Jet/SYSprice response
  • Later into the week profit-taking June and buy Q3 2021 and July if WDC trend is confirmed (step 1)

• Hedging

  • If GFS is the path June will come down as inflow+forecasts+SYSprice will be in territory not seen for a long time before we see a fallback to WDC
  • As for now, there is no proof that GFS =EC trend, more like EC = GFS trend the following days…

Weather-trading and hedging: medium-range

• Timing of hedging – medium time frame

  • Medium-term analysis shows that a CWW May often gets offsets by dry periods thereafter
  • Thus, accumulated precipitation we are closer to normal into the summer
  • The Gap to DEU support  NC prices and when Hydbal gets lower again price will rise closer to DEU

• Correction of portfolios

  • Especially if we see accumulated dry over the summer that will be needed since then the Gap between NC and Germany will be less => hedging prices are about  28-32 Euro for large companies
  • Into the winter new UK cable and low SE nuclear power production, as seen this winter, has strong bull potential during CDC periods regardless of Hydbal as long as inflow, wind and temps are low…