Sizing Up La Niña’s Reach into the 2021 Season
The La Niña weather pattern is likely to persist through the winter, according to NOAA’s Climate Prediction Center.
In past analytical work, FBN® has shown that this increases the odds of dry and hot weather for South America and can have some noticeable impacts on yields, especially in Argentina.
But what about implications for the U.S. growing season in 2021? Does the occurrence of a La Niña in the fall season have any far-reaching implications for the upcoming spring and summer growing season?
To answer that question, we explored 41 years' worth of weather and yield data to see if there was an association between a La Niña in the fall and the following year’s spring and summer climates.
Here is what we found:
First, in a La Niña fall, this tends to be associated with a drier/warmer West and a cooler/wetter East for the United States. This year is verifying that pattern, as the West is nearly engulfed in drought while the Eastern U.S. has had a stray flow of tropical storms to keep soil moisture levels elevated. For crops, the most immediate impact is on winter wheat, as key growing areas grapple with some degree of drought.
Historically, a fall La Niña tends to be associated with a persistence of dry and warm conditions in spring for the Southwest Plains, especially for Texas and Oklahoma. For the Corn Belt, spring conditions are more split, with a dry bias in the Western Corn Belt while the Eastern Corn Belt remains wetter than normal.
By summer, the patterns start to break down, with more moisture tending to favor the Western Corn Belt while the Eastern Corn Belt dries down. Equally important, there is no strong tendency to see warmer-than-normal temperatures in key corn and soy growing regions. But, the Northern Plains regions of Montana and North Dakota tend to be warmer and drier in the summer.
For U.S. yields, there is no compelling evidence to suggest strong deviations from normal in the upcoming growing season when the previous fall was classified as a La Niña. For corn, there is a modest uptick in yields for years following a La Niña fall season. For soybeans, though, there is a modest downgrade in yield. The most convincing data is for spring wheat, which tends to see lower yields in seasons following a La Niña fall, likely due to the associated dry and warm conditions in the Upper Plains.
FBN's take on what it means for the farmer
While there is little empirical reason to suspect U.S. yields will be affected next season by the current La Niña weather pattern, it does seem likely that the dry and warm climate of the Southwest Plains and Western Corn Belt will persist into spring. This could be market supportive as the balance sheet environment tightens and traders will likely place added emphasis on spring weather.
Want access to more insights like this?
This article is excerpted from our Market Intelligence newsletter, delivered weekly to FBN® Market Advisory members. With FBN Market Advisory, you'll receive truly personalized tools and reports to support your grain marketing efforts. Get access to market news, straightforward marketing recommendations, basis trend insights and weather reports — all relevant to your operation and geographic location.
Copyright © 2020 FBN BR LLC. All rights Reserved. FBN Market Intelligence is distributed by FBN BR LLC. Contact 877-472-4607 for more information. For the purposes of quality assurance and compliance, phone calls to and from FBN BR LLC may be recorded.
We do not guarantee customers will receive specific benefits or value from participating in FBN BR LLC; results will vary. The data in this article is being supplied as a courtesy by FBN BR LLC. The risk of trading futures and options can be substantial and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. FBN BR LLC does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This article contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by FBN BR LLC. Past performance is not necessarily indicative of future results.
Disclaimer: Futures and Option trading involves substantial risk, and may not be suitable for everyone. Trading should only be done with true risk capital. Past performance, either actual or hypothetical, is not necessarily indicative of future results.