(Bloomberg) -- La Nina, a weather pattern that can cause flooding in parts of Asia and colder weather in the U.S. , has set in and may continue through the winter, the Japan Meteorological Agency said, a day after the U.S. dropped its watch for the event.
There is 70 percent chance that the event, which also causes dry weather in Brazil, may continue through the winter period, the Japanese forecaster said on its website Friday. The U.S. Climate Prediction Center said Thursday it was dropping its La Nina watch and lowered the odds it will form this year to 35 to 45 percent from 75 percent in June. The Australian Bureau of Meteorology says a late and weak La Nina is still possible.
The onset of La Nina can bring more rains to countries including Indonesia, India and Thailand and help ease stress on palm oil and sugar cane from two years of below average rains caused by El Nino. While there’s little chance of the event forming this year, any event is unlikely to affect commodity supplies, according to Olam International Ltd. Still some investors may be caught off-guard if the weather event materializes, according to Naohiro Niimura, partner at Market Risk Advisory Co., a researcher in Tokyo.
“Investors have built up short positions in grains and oilseeds futures on an
outlook for record U.S. crops,” Niimura said. “They may be forced to buy back them, sending Chicago prices surging, if the La Nina phenomenon causes abnormal weather.”
La Ninas typically occurs every two to seven years when cooler sea surface temperatures trigger a reaction in the atmosphere. When the same area warms, it’s an El Nino. Forecasters haven’t seen any changes in thunderstorms, winds or ocean temperatures pointing to a La Nina in the last month, according to the U.S. center’s monthly update Thursday.
Sea water temperature monitored by the Japanese agency was 0.6 degrees Centigrade below the standard level in August, it said in the statement. Air movements and trade winds in the equatorial Pacific were showing characters of the La Nina phenomenon, it said.
Last year’s El Nino was one of the three strongest on record, generating the hottest global temperatures in more than 130 years, according to the U.S. National Centers for Environmental Information in Asheville, North Carolina. The event reduced Indian rainfall, parched farmland in Asia and curbed cocoa production in West Africa.
“Supplies from South America would become even tighter next year after drought in Brazil and floods in Argentina hurt corn and soybean production this year,” Niimura said.