- If El Niño arrives in 2017, it could impact pulse crops in India and Australian crops, spinning off to impact Canadian market prices
- Evolving La Niña/El Niño debate should incrementally add some hype to the Canadian grain market opinion at some point into 2017
- American corn and soybean crops hit records recently and El Niño could make it a repeat record in 2017
We say goodbye to La Niña, but could El Niño be back later this year?
Last week, the United States National Oceanic and Atmospheric Administration branch provided an update on its El Niño-Southern Oscillation. ENSO is one of the most followed global climatic features, as its cool phase La Niña and warm phase El Niño have somewhat contrasting effects on weather patterns worldwide.
Ever since the record-setting El Niño of late 2015 started winding down early last year, commodity markets have been fully focused on the La Niña that forecasters predicted would dominate late 2016 and potentially much of 2017.
La Niña tends to bring wet weather to Southeast Asia, warm summers and cold winters to much of North America, and dry conditions to Argentina and southern Brazil, among other impacts. El Niño often introduces the reverse conditions.
There could be a warm summer bias for the western half of the Canadian Prairies and somewhat drier summer bias in the western half as well.
La Niña finally emerged last August, but the necessary atmospheric ingredients for it to strengthen never fully came together, and the 2016-2017 episode will soon go down in climate history as a weak La Niña.
Water temperatures rise
Sea surface temperatures have remained in a weak state ever since as the anomaly fades. In recent weeks, waters have turned their warmest since last June. So with La Niña now faded away, will neutral El Niño-Southern Oscillation conditions prevail in 2017 or will it swing to a revisit of El Niño?
Here's a core summary of the United States National Oceanic and Atmospheric Administration report:
- Warmer waters are progressively moving east towards the North and South American coasts, and diluting what has been a dominant cooler pattern. Thus, the logic for the demise of La Niña.
- Government models show a continuation of warming water temperatures into the summer, such that the probability of being in a moderate El Niño this summer/autumn is modestly higher.
The latest El Niño-Southern Oscillation probability outlook shows equal chances for both neutral ENSO and El Niño, some 39 per cent for each, in the September through to November 2017 period.
If El Niño were to return for the 2017-2018 season, it's uncertain just how weak or strong it may become as it's still very early in the prediction period. The general consensus among models is for El Niño to be weak, but the next several monthly forecast updates will be able to deliver better confidence in the trend.
I will not take a stab on predicting weather but can say the intensity of recent La Niñas or El Niños have underwhelmed relative to media hype.
As well, this evolving event should incrementally add some hype to market opinion at some point in 2017, as some will embrace it. Think about the likelihood of the money flow speculative crowd bias to being long or stay married to a short position in ag commodity futures.
Weather impacts on Canadian ag
If it were to occur, what does El Niño strongly associate with? Several developments, but top three relevant to Canadian agriculture are:
- Modest summer/autumn dryness in India (pulses), Indonesia/Malaysia (palm, yielding nine months later) and Australia (crops).
- Warm summer bias for the western half of the Canadian Prairies and somewhat drier summer bias in the western half as well, even though maps don’t fully show it.
- Decent crop outcomes for Europe and the U.S. Some summer dryness in Eastern Europe and former Soviet Union, impacting pollination.
Bryce Anderson, DTN’s ag meteorologist says weather conditions this year are shaping up to be similar to 2001’s shifting pattern of weakening La Niña to neutral and potentially shading El Niño - a year when record large U.S. soybean yields were realized.
“The takeaway for producers on that is the Pacific is not offering a real big threat to crop production conditions here in the U.S. for this year," Anderson says. "That’s a real feature when either a neutral or an El Niño situation is in effect.”
The U.S. has already produced unparalleled corn and soybean crops in consecutive years, and Anderson says another year of record yields could be instore for 2017.
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