CT SPECIALIST · Softs / Climate Macro
Z6615 – [CT] ENSO La Nina Signal
La Nina ENSO regimes drive compound supply stress across US Texas and Indian monsoon cotton belts and transmit bullish regimes to Cotton futures at 60-day horizons via multi- regional yield compression.
At a glance
DORMANT · WAITING FOR APR
Current reading
-0.744
SEASONAL STATE
DORMANT · WAITING FOR APR
Winter composite tracks SST anomaly carry-forward; directional information lower outside…
Signal state
Moderate NEG
124 days in Stress phase
Updated
Nov 04, 2026
NOAA NINO3.4 monthly release
Sample
26-year window
Monthly cadence; 2000 onward
As of Nov 04, 2026. Updated nightly. · NEXT WINDOW APR-OCT COTTON GROWING-SEASON ENSO WINDOW
SIGNAL OVERVIEW
ENSO (El Nino Southern Oscillation) Pacific sea-surface temperature regimes drive compound climate effects across the US Texas cotton belt and the Indian monsoon system. La Nina (cold Pacific SST anomaly) coincides with Texas drought risk and weak Indian monsoon rainfall; both regions are major cotton producers and compound supply stress transmits to Cotton futures at 60-day horizons. The signal takes NOAA NINO3.4 SST anomaly and sign-flips so La Nina reads positive composite. Daily Spearman IC against Cotton forward 60-day returns is plus 0.166 at p-value 2.3e-42 across 6,676 observations, very strongly significant on the 26-year sample. Phase +1 (La Nina) delivers plus 3.52 percent fwd60d with plus 2.41 pp edge above baseline; Phase -1 (El Nino) delivers minus 1.02 percent with minus 2.13 pp edge below baseline. 5.65 pp Phase +1 minus Phase -1 spread. Monotone pattern.
LIVE CHART
CT ENSO La Nina Signal
What the chart is showing right now. The dark line is the NOAA NINO3.4 SST anomaly z-score, sign-flipped so La Nina reads positive composite, and tanh-bounded. Positive composite means La Nina (cold Pacific); negative composite means El Nino (warm Pacific). The bronze line in the middle panel is ICE US Cotton No. 2 first-nearby. The bottom panel tracks the trailing 252-day Spearman information coefficient between the composite and Cotton forward 60-day returns.
CHART PLACEHOLDER
Live chart renders here once the Node.js data layer is wired. Until then this slot shows a static placeholder.
COMPOSITE
-0.744 / tanh
STATE
Moderate NEG
PHASE
-0.96
PHASE +1 EDGE
+2.41 pp
PHASE -1 EDGE
-2.13 pp
TODAY’S PLAYBOOK READING
STATE
Moderate Neg
STATE AND HISTORY
El Nino firing at composite -0.744, 124 trading days running in Stress phase. Phase +1 (La Nina) delivers plus 3.52 percent fwd60d, edge plus 2.41 pp. Phase -1 (El Nino) delivers minus 1.02 percent, edge minus 2.13 pp. Daily Spearman IC plus 0.166 at p-value 2.3e-42 very strongly significant.
THE CLIMATE MECHANISM
La Nina Pacific SST anomaly coincides with Texas drought risk (Texas is 40 percent of US cotton production) and weak Indian monsoon rainfall (India is largest global producer). Compound supply stress from both regions tightens global balance. KYM truth. La Nina-driven Cotton rallies have historically delivered 10 to 30 percent returns during sustained multi-year La Nina episodes.
HOW TO POSITION
Climate macro overlay for Cotton via ENSO La Nina channel. La Nina firings flag bullish supply-stress setups via compound Texas and India yield compression. Pair with Texas Drought, Vidarbha CHIRPS, Pakistan Punjab CHIRPS, USDA PSD production, and CFTC positioning.
WHAT THE CHART SHOWS
The composite sits at -0.744 in the El Nino band. NOAA NINO3.4 Pacific SST has warmed into El Nino territory through late 2026.
TOP INPUTS FIRING
- Primary composite -0.744 State El Nino, 124 days running in Stress phase.
- NOAA NINO3.4 in El Nino territory Raw z-score -0.96; NOAA NINO3.4 Pacific SST anomaly has warmed into El Nino territory through late 2026.
- Daily IC very strongly significant, phase spread modest Daily Spearman IC plus 0.166 at p-value 2.3e-42 very strongly significant. Phase +1 vs Phase -1 spread 5.65 pp monotone.
THE TAKEAWAY
What this means for you today
THE CLIMATE CALL
Composite -0.744, El Nino. NOAA NINO3.4 shows Pacific SST in El Nino regime through late 2026. Signal firing in Stress phase for 124 days; forward 60-day edge in Phase -1 historically runs minus 2.13 pp below baseline.
THE EMPIRICAL CONTEXT
Daily IC plus 0.166 at p-value 2.3e-42 very strongly significant on 26-year sample. Phase +1 (La Nina) delivers plus 2.41 pp edge; Phase -1 (El Nino) delivers minus 2.13 pp edge. 5.65 pp Phase +1 minus Phase -1 spread. Modest monotone pattern.
THE HONEST CAVEAT
Non-overlap IC at 60-day sampling plus 0.147 at p-value 0.12 sign-consistent but not independently significant on 112 samples. ENSO signal via monthly NOAA release cadence. Pattern is non-monotone with ENSO Neutral delivering negative edge; signal is a one- sided La Nina bullish detector rather than symmetric overlay.
THE REGIME MAP
The three phases, forward returns and sample share
Computed from 4,239 post-warmup trading days (2000 onward). Phase +1 (La Nina) delivers +2.41 pp fwd60d edge. Phase -1 (El Nino) delivers -2.13 pp. 5.65 pp spread; monotone pattern.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| La Nina | +1 | 35.6% (1507 d) | +3.52% | +2.41pp | Sep 2025, Dec 2024, Aug 2021 | |
| ENSO Neutral | 0 | 38.7% (1641 d) | +0.24% | -0.88pp | Feb 2026, Feb 2025, May 2024 | |
| El Nino TODAY | -1 | 25.7% (1091 d) | -1.02% | -2.13pp | May 2026, Jun 2023, Mar 2020 |
The historical pattern
Signature episodes in the 26-year sample
What this measures
Z-score of NOAA NINO3.4 monthly SST anomaly, sign-flipped so La Nina (cold anomaly) reads positive composite, tanh-bounded. Positive composite equals La Nina equals bullish CT via compound Texas drought and weak Indian monsoon supply stress. Target ICE US Cotton No. 2 first-nearby back-adjusted close.
Why it matters
Why La Nina matters for Cotton
La Nina (cold Pacific SST anomaly) is a compound climate regime that systematically coincides with Texas drought risk and weak Indian monsoon rainfall. Texas produces roughly 40 percent of US cotton; India is the world’s largest cotton producer. La Nina compounds yield stress across both regions simultaneously. The 2010-12 and 2020-23 La Nina episodes delivered the two largest Cotton rallies of the 21st century via this compound-supply-shock channel.
How to use this signal today
Climate macro overlay for Cotton via the ENSO La Nina channel. La Nina firings flag bullish supply-stress setups via compound Texas and Indian yield compression. Pair with Texas USDM Drought, Vidarbha CHIRPS, Pakistan Punjab CHIRPS, USDA PSD US production, and CFTC positioning. La Nina works as a slow-moving top-of-funnel climate filter; the regional weather signals confirm where the stress is materializing.
Risk overlay
Daily IC very strongly significant on 26-year sample but non-overlap test plus 0.147 at p-value 0.12 sign-consistent but not independently significant on 112 samples. ENSO signal uses monthly NOAA release cadence (NINO3.4 updates monthly). Phase +1 and Phase -1 edges are modest at approximately 2 pp each; 5.65 pp Phase +1 minus Phase -1 spread. Use as top-of-funnel climate filter not standalone directional driver.
Signal consumers and siblings
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 06, 2026 11:46 AM ET