Forecasts of weather probabilities

There are many uncertainties in the weather risk market in which future weather will tilt good fortune to one party or the other of a weather financial contract. In an effort to better meet the needs of the weather risk market, CPC has begun to publish experimental forecasts in two probability formats on the internet: one quantifies the shift of the centers of forecast probability distributions over the US, the other presents the forecast “Probability of Exceedance” distribution by climate region with confidence intervals and related information. These probability forecasts are released each month for individual months and groups of months out to 13 months in the future. Both the forecast community and the weather risk market watch them very closely. It is important that participants in the weather risk market and other end-users of these products understand the experimental nature of these forecasts, our confidence and the implicit uncertainties in these forecasts.