What’s Driving This Summer’s Weird WeatherBy and
Missing high heat hasn’t helped move natural gas prices much
Rains curb some Midwest drought with more needed in August
Summer’s been a bit of a hit-and-miss affair as far as farmers and natural gas traders are concerned.
There’s been heat in the West and drought in the upper Great Plains. A dividing line across the Corn Belt has left the southern third dry, and states to the north and east drenched even after May’s rain delayed sowing or caused farmers to replant fields.
The culprits are the usual summer retreat of the jet stream and the absence of a game changer such as an El Nino or La Nina weather pattern. The result has been a lack of sustained heat in the East, which would boost gas prices, while both corn and soybeans have swung higher in the wake of the drought and heavy rains.
“I can’t recall a time when the weather models were so erratic during the middle of the critical growing season,” Richard Feltes, head of market insights at Chicago-based R.J. O’Brien & Associates, said by phone. “Weather conditions have reduced yield potential below trend.”
Since summer began, gas prices have struggled to make a sustained break above $3 per million British thermal units on the New York Mercantile Exchange. Corn futures in Chicago rebounded from an eight-month low on June 23 to a one-year high on July 11 while soybeans surged 15 percent during the same period.
The daily average temperature dropped 9 degrees Fahrenheit (5 Celsius) below normal on July 24 in New York. A year ago it was 8 degrees warmer than average.
“It is really about the lack of follow through with the strong heat in the East,” said Teri Viswanath, managing director for natural gas at PIRA Energy Group in New York. “We’ve had periods of warm temperatures but we have not sustained it like last year.”
During summer, the jet stream retreats north to Canada, said Mike Halpert, deputy director of the U.S. Climate Prediction Center in College Park, Maryland. That makes it harder for larger, weather-changing patterns to take hold.
The lack of direction is partly the result of bland Pacific Ocean temperatures. Unlike past years when an El Nino and then La Nina climate pattern dominated the ocean and influenced global weather, the basin is in its neutral phase.
“The large-scale pattern this summer, characterized by a lack of either El Nino or La Nina, has supported persistent western heat,” said Todd Crawford, chief meteorologist at The Weather Company in Andover, Massachusetts. “That heat wiggles east a bit, and then back to the west, every few weeks.”
Come and Gone
Without sustained heat, the gas market has to start looking ahead to winter because the hottest point of the summer has come and gone for many parts of the U.S., according to Viswanath. August rainfall and an extended growing season into October will determine final U.S. corn and soybean yield potential following recent adverse weather, R.J. O’Brien’s Feltes said.
On the rain side of the ledger, Des Moines, Iowa, is about 2.3 inches below normal for July, the National Weather Service said. Just over 22 percent of the state is in drought, the U.S. Drought Monitor said. Conditions are worse in the High Plains. Drought covers more than 82 percent of South Dakota and 74 percent of North Dakota.
There’s little rain coming to reverse the drought, Halpert said. “Nothing looks favorable for them through the first week of August.”
There’s still the possibility a hurricane could sweep up the East or West Coast to break the impasse, said Crawford. Failing that, there’s the autumn to look forward to.
“Typically, these types of patterns last into September before the fall pattern shows up,” Crawford said. “For now though, it is wise not to fight the trend.”