The Jim Bakker Show

Global wheat supply to crisis levels; big China stocks won’t provide relief

FILE PHOTO: Arnaud Caron, a French farmer drives an old Mc Cormick F8-413 combine as he harvests his last field of wheat, in Vauvillers, northern France, July 23, 2018. REUTERS/Pascal Rossignol

By Nigel Hunt

LONDON (Reuters) – A scorching hot, dry summer has ended five years of plenty in many wheat producing countries and drawn down the reserves of major exporters to their lowest level since 2007/08, when low grain stocks contributed to food riots across Africa and Asia.

Although global stocks are expected to hit an all-time high of 273 million tonnes at the start of the 2018/19 grain marketing season, according to U.S. Department of Agriculture estimates, the problem is nearly half of it is in China, which is not likely to release any onto global markets.

Experts predict that by the end of the season, the eight major exporters will be left with 20 percent of world stocks – just 26 days of cover – down from one-third a decade ago.

The USDA estimates that China, which consumes 16 percent of the world’s wheat, will hold 46 percent of its stocks at the beginning of the season, which starts around now, and more than half by the end.

The 126.8 million tonnes China is estimated to hold is up 135 percent from 54 million five years earlier.

“People need to get rid of China stocks (in their calculations) … if you do that, it’s just exceptionally tight,” said Dan Basse, president of AgResource Co in Chicago.

A repeat of the 2007/2008 crisis, which forced many countries to limit or ban exports, is unlikely in the absence of other drivers at the time, including $150-per-barrel crude oil.

The recent three-year high for wheat prices of $5.93 a bushel on the Chicago Board of Trade pales in comparison to the high of $13.34-1/2 a bushel in February 2008.

Importers in North Africa also appear to be better placed this time, with higher stocks of their own.

“It could have an impact on food inflation but in North African countries they have a good crop this year, fortunately, so their reliance is not as big as in the past years,” said Abdolreza Abbassian, chief economist at the United Nations’ Food and Agriculture Organisation (FAO).

“I don’t think we want to be alarmist in terms of consequences,” he added.

China started stockpiling wheat in 2006, setting a guaranteed floor price to ensure food security and stability.

At around $9.75 a bushel as of last week, Chinese prices are now so high that they cannot sell internationally without incurring a major loss.

Rabobank analyst Charles Clack said he expected China to continue to build stocks into next year but in the long-term, it would look to reduce reserves by curbing domestic production, reducing imports or conducting internal auctions.

“It will be a slow process … I wouldn’t expect exports to come flying out anytime soon,” he said.

Government wheat reserves now total nearly 74 million tonnes, according to Shanghai JC Intelligence Co Ltd, most of it from 2014-2017 but a small amount as old as 2013.

Sylvia Shi, analyst at JC Intelligence, said China would continue to import wheat it cannot produce in sufficient volumes to help meet a growing appetite for high-protein varieties for products like bread and other baked products as diets become Westernised.

DROUGHT

The wheat crop in several of the world’s biggest exporters – Argentina, Australia, Canada, the European Union, Kazakhstan, Russia, Ukraine and the United States – has suffered this year.

A spring drought in the Black Sea bread baskets Russia and Ukraine was swiftly followed by a summer heatwave in the European Union. Dry weather now also threatens crops in another important exporter, Australia.

Evidence of the serious harm done has grown as harvesting progresses.

Forecasts for the 28-member European Union have repeatedly been cut, with Germany set for its lowest grain harvest in 24 years after crops wilted under the highest summer temperatures since records began in 1881.

Russia’s agriculture ministry held a meeting with grain traders on Friday to discuss export volumes.

The ministry denied export limits were discussed but traders, some of whom were at the meeting, said curbs might be imposed later in the season following complaints from domestic meat producers about the rising cost of animal feed.

The United States is best placed to capitalize on a shortfall in global supply, with much higher stocks than rival exporters and rising production.

The outlook provides a much-needed boost for U.S. farmers caught in the crossfire of a trade war with China, a huge importer of U.S. soybeans and corn, as well as Mexico and Japan, two of the top buyers of U.S. wheat.

“The winner in the long term is the U.S. as they should get some demand flow back to them. It has been several years since we have seen the U.S. be in a position to get demand,” said Matt Ammermann, a commodity risk manager with INTL FCStone.

The Black Sea and Europe look set to lose market share, Ammermann said.

Canada, one of the world’s biggest high-quality wheat exporters, is expected to enjoy bigger yields than last year, according to a recent crop tour. But patchy rains have left crops highly variable across the western provinces.

“We don’t have a bin-buster coming. I just don’t see how we can push exports too much higher,” said Paterson Grain trader Rhyl Doyle.

SOUTHERN RESPONSE

The two major wheat exporters in the southern hemisphere, Argentina and Australia, are still months away from harvest.

A record crop is forecast in Argentina but production in Australia is expected to fall to the lowest level in more than a decade due to drought across the east coast.

Francisco Abello, who manages 7,000 hectares of land in western and north-central Buenos Aires province, said he and other growers are out to take advantage of high prices by investing in fertilizers to increase yields.

“We are having a great start to the season,” Abello said. “The ground was moist at planting time. Then it was cold and dry, which are the best conditions for the early wheat growing season.”

The Buenos Aires Grains Exchange has a preliminary wheat harvest estimate of 19 million tonnes, above what it says is the current record of 17.75 million tonnes.

In Australia, the outlook is less rosy. Analysts said production could fall below 20 million tonnes for the first time since 2008, although it is still likely to be well in excess of that year’s crop of just 13 million tonnes.

“The west of the country is looking good so the largest producing region could produce a crop in excess of 9 million tonnes alone. That may keep the headline number up,” said Phin Ziebell, an agribusiness economist at the National Australia Bank. “But with dry weather reducing output on the east, it could reduce exports nationally.”

(Additional reporting by Julie Ingwersen in Chicago, Dominique Patton and Hallie Gu in Beijing, Rod Nickel in Winnipeg, Sybille de La Hamaide and Valerie Parent in Paris, Hugh Bronstein in Buenos Aires and Colin Packham in Sydney; Graphics by Amanda Cooper; Editing by Veronica Brown and Sonya Hepinstall)

Sanctions-hit North Korea warns of natural disaster brought by heat wave

FILE PHOTO: A North Korean flag flutters on top of a 160-metre tower in North Korea's propaganda village of Gijungdong, in this picture taken from the Tae Sung freedom village near the Military Demarcation Line (MDL), inside the demilitarised zone separating the two Koreas, in Paju, South Korea, April 24, 2018. REUTERS/Kim Hong-Ji

By Hyonhee Shin

SEOUL (Reuters) – North Korea on Thursday called for an “all-out battle” against record temperatures that threaten crops in a country already grappling with tough international sanctions over its nuclear weapons program.

The resulting drought has brought an “unprecedented natural disaster”, the isolated nation said, warning against crop damage that could savage its farm-reliant economy, battered by sanctions despite recent diplomatic overtures.

“This high-temperature phenomenon is the largest, unprecedented natural disaster, but not an obstacle we cannot overcome,” the North’s Rodong Sinmun said, urging that “all capabilities” be mobilized to fight the extended dry spell.

Temperatures have topped a record 40°C (104°F) in some regions since late July, and crops such as rice and maize have begun to show signs of damage, the mouthpiece of the ruling Workers’ Party said in a front-page commentary.

“Whether the current good crop conditions, for which the whole nation has made unsparing investment and sweated until now, will lead to a bumper year in the autumn hinges on how we overcome the heat and drought,” it added.

Similar past warnings in state media have served to drum up foreign assistance and boost domestic unity.

“I think the message was a precautionary one to minimize any impact on daily life,” said Dong Yong-seung, who runs Good Farmers, a group based in Seoul, capital of neighboring South Korea, that explores farm projects with the North.

But the mention of unprecedented weather, and a series of related articles, suggest the heat wave could further strain its capacity to respond to natural disasters, said Kim Young-hee, a defector from North Korea and an expert on its economy at Korea Finance Corp in Seoul.

The warning comes after North Korean leader Kim Jong Un announced in April a shift in focus from nuclear programs to the economy, and held an unprecedented June summit with U.S. President Donald Trump in Singapore.

Since then, the young leader has toured industrial facilities and special economic zones near the North’s border with China, a move experts saw as a bid to spur economic development nationwide.

“He has been highlighting his people-loving image and priority on the economy but the reality is he doesn’t have the institutions to take a proper response to heat, other than opening underground shelters,” added Kim, the economist.

GOOD CROP CONDITIONS

Drought and floods have long been a seasonal threat in North Korea, which lacks irrigation systems and other infrastructure to ward off natural disasters.

Last year, the U.N. Food and Agriculture Organisation warned of the North’s worst drought in 16 years, but late summer rains and privately produced crops helped avert acute shortages.

There appear to be no immediate signs of major suffering in the North, with rice prices stable around 62 U.S. cents per kg through the year to Tuesday, a Reuters analysis of data compiled by the Daily NK website showed.

The website is run by defectors who gather prices through telephone calls to traders in the North, gaining a rare glimpse into the lives of ordinary citizens.

Crops are good this year because there was little flooding to disrupt the early spring planting season, said Kang Mi-jin of the Daily NK, based in Seoul.

“They say nothing remains where water flowed away, but there is something to harvest after the heat,” Kang said, citing defectors. “Market prices are mainly determined by Chinese supplies and private produce, rather than crop conditions.”

The October harvest would reveal any havoc wreaked by the weather, Kim Young-hee added.

North Korea suffered a crippling famine in the 1990s when a combination of bad weather, economic mismanagement and the demise of fuel subsidies from the Soviet Union all but destroyed its state rationing system.

However, rationing has slowly been overtaken by an increase in foreign products, mainly from China, and privately produced food sold in North Korean markets, a factor experts say U.N. reports overlook.

The neighbors are in talks to help the North modernize its economy, step up disaster response measures and expand forests in a follow-up to April’s historic summit between Kim and South Korea’s President Moon Jae-in.

Across the border, temperatures hit 39.6°C (103.28°F) in Seoul on Wednesday, their highest since weather authorities began monitoring in 1907. The heat has caused 29 deaths and injuries to more than 2,350 people, health officials have said.

(Reporting by Hyonhee Shin, Editing by Soyoung Kim and Clarence Fernandez)

Japan’s heat wave drives up food prices, prison inmate dies

A woman uses a parasol on the street during a heatwave in Tokyo, Japan July 25, 2018. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) – Vegetable prices in Japan are spiking as much as 65 percent in the grip of a grueling heat wave, which drove temperatures on Wednesday to records in some areas hit by flooding and landslides, hampering clean-up and recovery efforts.

As many as 65 people died in the week to July 22, up from 12 the previous week, government figures show, while a prisoner in his forties died of a heat stroke in central Miyoshi city, amid what medical experts called an “unprecedented” heat wave.

An agriculture ministry official in Tokyo, the capital, warned against “pretty severe price moves” for vegetables if predictions of more weeks of hot weather held up, resulting in less rain than usual.

“It’s up to the weather how prices will move from here,” the official said. “But the Japan Meteorological Agency has predicted it will remain hot for a few more weeks, and that we will have less rain than the average.”

The most recent data showed the wholesale price of cabbage was 129 yen ($1.16) per kg in Tokyo on Monday, the ministry said, for example, an increase of 65 percent over the average late-July price of the past five years.

Temperatures in Japan’s western cities of Yamaguchi and Akiotacho reached record highs of 38.8 Celsius (101.8 Fahrenheit) and 38.6 C (101.5 F), respectively, on Wednesday afternoon.

In Takahashi, another western city and one of the areas hit hardest by this month’s flooding, the mercury reached 38.7 C (101.7 F), just 0.3 degrees off an all-time high.

In Miyoshi, where the prisoner died after a heat stroke, the temperature on the floor of his cell was 34 degrees C (93 F) shortly before 7 a.m. on Tuesday. The room had no air-conditioning, like most in the prison.

Authorities who found him unresponsive in his cell sent him to a hospital outside the prison, but he was soon pronounced dead, a prison official said.

“It is truly regrettable that an inmate lost his life,” Kiyoshi Kageyama, head of the prison, said in a statement. “We will do our utmost in maintaining (prisoners’) health, including taking anti-heat stroke steps.”

On the Tokyo stock market, shares in companies expected to benefit from a hot summer, such as ice-cream makers, have risen in recent trade.

Shares in Imuraya Group, whose subsidiary sells popular vanilla and red-bean ice cream, were up nearly 10 percent on the month, while Ishigaki Foods, which sells barley tea, surged 50 percent over the same period.

Kimono-clad women using sun umbrellas pause on a street during a heatwave in Tokyo, Japan July 25, 2018. REUTERS/Issei Kato

In neighboring South Korea, the unremitting heat has killed at least 14 people this year, the Korea Centers for Diseases Control and Prevention said.

The heat wave was at the level of a “special disaster”, South Korean President Moon Jae-in said on Tuesday, as electricity use surged and vegetable prices rose.

(Reporting by Kiyoshi Takenaka in Tokyo and Jeongmin Kim in SEOUL; Additional reporting by Ritsuko Ando and Aaron Sheldrick in TOKYO; Editing by Clarence Fernandez)

Heatwave blankets Japan, kills 14 people over long weekend

FILE PHOTO: A volunteer, for recovery work, wipes his sweat as he takes a break in a heat wave at a flood affected area in Kurashiki, Okayama Prefecture, Japan, July 14, 2018. REUTERS/Issei Kato/File Photo

TOKYO (Reuters) – An intense heatwave killed at least 14 people over a three-day long weekend in Japan, media reported on Tuesday, and high temperatures hampered the recovery in flood-hit areas where more than 200 people died last week.

Temperatures on Monday, a national holiday, surged above 39 degrees Celsius (102.2 Fahrenheit) in some inland areas and combined with high humidity to produce dangerous conditions, the Japanese Meteorological Agency (JMA) said.

At least 14 people died from the heat over the long weekend, media reports said, including a woman in her 90s who was found unconscious in a field. Thousands more were treated in hospitals for heat-related conditions.

The heat was most intense in landlocked areas such as Gifu prefecture, where it soared to 39.3 Celsius (102.7 F) in the town of Ibigawa on Monday – the hottest in the nation. The capital Tokyo recorded a high of 34 Celsius on Monday.

Temperatures in parts of western Japan hit by deadly floods reached a high of 34.3 Celsius by midday on Tuesday, creating dangerous conditions for military personnel and volunteers clearing mud and debris.

“It’s really hot. All we can do is keep drinking water,” one man in Okayama told NHK television.

Temperatures of 35 or above – known in Japanese as “intensely hot days” – were recorded at 200 locations around Japan on Sunday, the JMA said, which is unusual for July but not unprecedented.

Similar scorching temperatures were reported from 213 locations on a July day in 2014.

Last year, 48 people died from heat between May and September, with 31 deaths in July, according to the Fire and Disaster Management Agency.

The current heatwave was due to the layering of two high pressure systems over much of Japan and is expected to continue for the rest of the week if not longer, the JMA said.

(Reporting by Elaine Lies; Editing by Darren Schuettler)

Heat wave wilts much of U.S. Midwest, Northeast

A man sits in the shade at Riverbank State Park during very hot weather in the Washington Heights section of Manhattan in New York City, New York, U.S., June 18, 2018. REUTERS/Mike Segar

By Suzannah Gonzales

CHICAGO (Reuters) – Chicago and St. Louis sweltered on Monday at the center of a heat wave that stretched across the U.S. Midwest and Northeast, although relief could come as soon as Monday evening in some areas.

After a hot weekend, the temperature reached 91 Fahrenheit (33 Celsius) in Chicago and 92F in St. Louis by early afternoon, the National Weather Service said, with both cities opening air-conditioned cooling centers to the public.

The heat index, which factors in humidity, hit 100F in St. Louis. Similar heat in Detroit compelled the city to announce it would close many public schools three hours early on Monday, the Detroit News reported.

“This type of heat wave is typical for early summer,” said Bob Oravec, a weather service forecaster, adding everywhere from Kansas City, Missouri, to Boston and Washington were experiencing above-average temperatures. “It’s not astronomical.”

Cleveland, Ohio, broke a record on Sunday for its hottest June 17 on record with the mercury reaching 94F, Oravec said.

A Chicago native, Sharonda Williams, 31, carried a frozen drink as she returned to work at an outdoor kiosk for a bus tour company on Monday afternoon.

“It’s hot, but you really can’t complain,” she said. “When it’s freezing cold, you’re wishing for the hot weather. But now that we got it, you want the freezing cold. You can’t win.”

The National Weather Service forecasts a rapid cool-down on Monday evening in Chicago as cooler weather blew in off Lake Michigan, with the possibility of scattered thunderstorms.

The Great Lakes and Northeast regions, where many local governments issued warnings of poor air quality, will also cool down as the week goes by with the arrival of thunderstorms as a cold front presses south, the weather service said.

(Reporting by Suzannah Gonzales; Additional reporting by Jonathan Allen and Diana Kruzman in New York; Writing by Jonathan Allen; Editing by Lisa Shumaker)

More Florida Keys residents return home to survey Irma’s destruction

Residents walk though a debris field of former houses following Hurricane Irma in Islamorada, Florida, U.S., September 15, 2017. REUTERS/Carlo Allegri

By Carlo Allegri

KEY LARGO, Fla. (Reuters) – More residents who had fled the Florida Keys ahead of Hurricane Irma were allowed to return to their homes on Saturday, as authorities prepared to reopen Key West at the end of the devastated archipelago on Sunday.

As Florida struggled to return to normal after the powerful storm struck this week, Governor Rick Scott ordered all nursing homes in the state to obtain emergency generators.

The order followed the deaths of eight elderly people this week at a sweltering nursing home north of Miami that lost power.

“I am outraged over the deaths of eight Floridians at the Rehabilitation Center at Hollywood Hills in Broward County and I am demanding answers as we furiously investigate this terrible loss of life,” Scott said in a statement on Saturday.

Irma was one of the most powerful Atlantic storms on record before striking the U.S. mainland as a Category 4 hurricane on Sept. 10. It killed at least 84 people, many of them in the Caribbean. The storm killed at least 33 in Florida.

In the Keys, Irma tore apart houses, flattened mobile homes and pushed boats onto the highway linking the archipelago, prompting authorities to largely shut down access to the islands. Thousands of anxious residents who evacuated have been pressing to be allowed to return home.

Cudjoe Key, where Irma made landfall in the lower Florida Keys, and nearby areas were especially hard hit.

A resident carries belongings next to a U.S. flag in a debris field of former houses following Hurricane Irma in Islamorada, Florida, U.S., September 15, 2017. REUTERS/Carlo Allegri

“The damage in those areas is just beyond belief,” Monroe County Mayor George Neugent told the Miami Herald.

Authorities on Saturday allowed local residents to drive to the checkpoint just before Marathon in the middle of the keys, according to the Monroe County Sheriff’s Office, which polices the Keys.

Some gasoline stations were reopening, but cell phone service and electricity remained out in most of the islands. Residents were advised to boil water before drinking.

On Sunday morning, residents will regain access to Key West at the end of the archipelago, the Sheriff’s Office said in a statement on its Facebook page.

Florida utilities restored power to more residents on Saturday. The state had 1.1 million customers without electricity, down from 1.5 million on Friday, according to the Florida Division of Emergency Management.

Eight patients at the Rehabilitation Center at Hollywood Hills died this week after being exposed to the heat. The center was left without full air conditioning after the hurricane hit, and the deaths stirred outrage over what many saw as a preventable tragedy.

Scott on Saturday ordered emergency rules requiring all assisted living facilities and nursing homes to obtain a generator within 60 days. The goal is to ensure such facilities can operate for at least 96 hours after an outage.

Administrators at the nursing home said they repeatedly called Florida Power & Light Co and state officials after a transformer powering the home’s air conditioning system went out during the storm on Sunday.

The utility did not arrive until Wednesday after some patients began experiencing health emergencies, prompting evacuation of the center, according to a timeline provided by the nursing home.

Scott on Saturday blamed the nursing home for what he described as its failure to protect life.

“As ANY health care provider knows to do, if their patients are in danger – they MUST call 911,” Scott said in a written statement.

(Writing by Alex Dobuzinskis; Editing by Frank McGurty and David Gregorio)

Firefighters work to suppress California wildfire near Big Sur coast

Firefighters taking care of july 2016 wildfires

By Mike Fiala

CARMEL-BY-THE-SEA, Calif. (Reuters) – Firefighters on Friday were working to suppress a deadly wildfire near California’s famed Big Sur coast that has burned more than 40 homes, forced hundreds of residents to flee and closed popular parks at the height of the summer travel season.

The so-called Soberanes Fire erupted last Friday just south of the upscale oceanside town of Carmel-by-the-Sea and has raged through nearly 30,000 acres (12,000 hectares) of drought-parched chaparral, tall grass and timber into the Los Padres National Forest.

Efforts by 4,200 firefighters to hack buffer lines through dense vegetation around the perimeter of the blaze have been complicated by worsening weather conditions – super-low humidity and gradually rising temperatures – officials said.

Containment stood at 15 percent on Friday morning, even as the overall size of the fire zone continued to expand, leaving another 2,000 structures threatened and about 350 people displaced.

Flames have already destroyed 41 homes and 10 outbuildings, with at least two other dwellings damaged by fire, officials said. Firefighters however managed to save a number of large homes in the hills above the exclusive Carmel Highlands community.

The fire threat has also prompted authorities to close a string of heavily visited California campgrounds and recreation areas along the northern end of the Big Sur coastline, including Julia Pfeiffer Burns State Park and Point Lobos Natural Reserve.

Highway 1, the scenic route that winds along the famed seaside cliffs overlooking the Pacific, remained open, though motorists were advised to allow for traffic delays due to a heavy volume of fire-fighting equipment entering and existing the roadway.

The blaze took a deadly turn on Tuesday when a bulldozer operator hired by private property owners to help battle the flames was killed when his tractor rolled over, marking the second California wildfire fatality in a week.

He was identified on Thursday as 35-year-old Robert Oliver Reagan III, from the town of Friant, California.

On Thursday, California Office of Emergency Services received a federal grant to help pay for firefighting efforts.

About 300 miles (485 km) away, a 67-year-old man was found dead in a burned-out car last Saturday after refusing to heed evacuation orders in a separate fire that destroyed 18 homes in a mountainous area north of Los Angeles.

That blaze, dubbed the Sand Fire, was listed as 65-percent contained on Thursday after charring more than 38,000 acres (15,400 hectares).

Lingering smoke and soot spewed by the Erskine Fire have prompted air-quality regulators to warn residents in parts of the Los Angeles region to avoid outdoor activities for the time being.

(Additional reporting by Brendan O’Brien in Milwaukee; Editing by Alison Williams)

Two L.A.-area wildfires threaten to merge after forcing evacuations

By Alex Dobuzinskis

LOS ANGELES (Reuters) – Two rapidly growing wildfires burning a few miles apart in parched foothills just northeast of Los Angeles threatened to merge on Tuesday after forcing the evacuation of more than 700 people, officials said.

The blazes came as California and other southwestern U.S. states baked in a heat wave.

The so-called Fish Fire and the Reservoir Fire, which both broke out on Monday in the Angeles National Forest, more than doubled in size overnight and were entirely unconfined, the U.S. Forest Service said in a statement. (http://bit.ly/28Lbe6h)

The Fish Fire, whose cause is under investigation, has grown to 3,000 acres (1,214 hectares) while the Reservoir Fire, which fire officials say was sparked by a car crash, stood at about 2,400 acres (971 hectares), according to figures from the U.S. Forest Service.

“It is a possibility that the two fires would merge,” Andrew Mitchell, a spokesman for the team battling the Reservoir Fire, said in a phone interview.

The fires burning more than 20 miles (32 km) northeast of downtown Los Angeles have forced at least 700 people to evacuate, Mitchell said. The communities nearest the flames include the suburban towns of Duarte and Azusa.

Overnight, a flank of the Fish Fire crept down a hillside on the east side of Duarte, lapping at brush just beyond some houses before firefighters extinguished the flames, Los Angeles County Fire Chief John Tripp said at a news conference.

“Our big threat today is still that left side of the fire,” Tripp said. “That still is a very uncontrolled flank of the fire.”

Officials warned more evacuations could be ordered.

While the two blazes have not yet merged, they are being handled as one incident called the San Gabriel Complex Fire. Over 600 firefighters are battling those blazes fueled by dry brush and chaparral, officials said.

Meanwhile, a half-dozen other wildfires burned across California.

In the coastal part of the state, firefighters have made steady progress in handling the so-called Sherpa Fire, a seven-day old blaze northwest of Santa Barbara that has burned nearly 8,000 acres (3,237 hectares) in an area of ranches and campgrounds. That fire is 70 percent contained, according to tracking website InciWeb.gov.

Two states away, the Dog Head Fire in central New Mexico has charred more than 17,000 acres (6,880 hectares) and was 46 percent contained after destroying 24 homes and 21 minor structures soon after it broke out last week.

(Additional reporting by Laila Kearney in New York; Editing by Phil Berlowitz and Cynthia Osterman)

California power grid passes first heat wave test amid gas shortage

(Reuters) – California’s power grid passed its first test of the summer with no rolling blackouts on Monday, when customers cranked up their air conditioners as temperatures soared into the triple-digits for the second consecutive day in some southern parts of the state.

The California Independent System Operator, which manages the state’s power grid, issued a so-called flex alert on Sunday, urging homes and businesses to conserve energy on Monday afternoon.

As consumers heeded that call and temperatures on Monday came in a little cooler than expected, the ISO cut its peak power demand projection for the day to 43,728 megawatts from 45,316 MW.

Monday’s alert was the first big test of power generators’ ability to meet heightened energy demands in the greater Los Angeles area without natural gas supplies normally furnished by the now-crippled Aliso Canyon. The storage field, California’s largest, has been effectively idled since a major well rupture there last autumn.

So far, the ISO has not issued another flex alert for Tuesday but said on its website it would be “helpful” if customers conserve energy.

With cooler temperatures expected for the rest of the week, the ISO forecast demand would peak at 42,581 MW on Tuesday and just 39,036 on Wednesday.

AccuWeather meteorologists forecast the mercury would reach 87 degrees Fahrenheit (31 Celsius) in Los Angeles on Tuesday before falling to a near-normal 82 degrees on Wednesday. They had exceeded 100 degrees on Monday.

With Aliso Canyon shut down, state regulators have warned that the Los Angeles area faces up to 14 days of gas shortages severe enough to trigger blackouts this summer.

Aliso Canyon, owned by Sempra Energy’s Southern California Gas Co unit, normally supplies the region’s 17 gas-fired power plants, hospitals, refineries and other key parts of the state’s economy.

(Reporting by Scott DiSavino; Editing by Lisa Von Ahn)

Heat wave tests Southern California’s power grid amid gas shortage

Thermometer sign reads 118 degrees, heat

By Steve Gorman and Nichola Groom

LOS ANGELES (Reuters) – California’s power grid operators warned homes and businesses on Monday to conserve electricity as rising demand for air conditioning stoked by a record-setting heat wave across the U.S. Southwest tested the region’s generating capacity.

The so-called Flex Alert was posted until 9 p.m. Pacific time during a second day of triple-digit temperatures that strained Southern California’s energy production, creating a potential for rolling blackouts on the first official day of summer.

But the peak hour for energy demand came and went Monday evening without disruption of the region’s power delivery network, the California Independent System Operator (ISO) reported.

“Since we’re past that and have not experienced any trouble, I think we’re headed into the safe zone,” agency spokeswoman Anne Gonzales told Reuters.

Temperatures were expected to begin abating on Tuesday, according to weather forecasts. As of Monday night, there were no plans to extend the Flex Alert, ISO officials said.

Monday’s alert was the first big test of power generators’ ability to meet heightened energy demands in the greater Los Angeles area without natural gas supplies normally furnished by the now-crippled Aliso Canyon gas storage field, effectively idled since a major well rupture there last fall.

The oven-like heat prompted the city of Los Angeles to keep its network of public “cooling centers” – libraries, recreation centers and senior centers – open for extended hours as a haven for people whose homes lack air conditioning.

Area home improvement and hardware merchants were doing a brisk business in fans and AC window units.

Brett Lopes, 31, a freelance lighting technician, stopped in a Home Depot outlet near downtown to buy supplies for a homemade air conditioner he called a “swamp cooler” to use while he waited for his landlord to repair his broken AC unit.

“It’s brutal,” he said of the heat, explaining that he looked up directions on YouTube for assembling the makeshift cooling device. “It doesn’t work as well as AC, but it’s better than sitting in 100 degrees.”

Others flocked to public swimming pools.

“It was really refreshing today, but more crowded than usual,” said Paul Stephens, 31, a pastor who was swimming laps at the Rose Bowl Aquatic Center in Pasadena, where the mercury climbed to 108 Fahrenheit (42 Celsius) .

BALANCING THE GRID

The ISO, which runs the state’s power grid, urged consumers on Monday to cut back on electricity usage, especially during late-afternoon hours.

Utility customers were advised to turn off unnecessary lights, set air conditioners to 78 degrees Fahrenheit or higher, and wait until after 9 p.m. to run major appliances, such as clothes washers and dryers.

Gonzales credited public cooperation with the flex alert for likely helping avert widespread outages on Monday.

Large stretches of three states sweltered in a second straight day of record, triple-digit temperatures, as the National Weather Service posted excessive-heat warnings through Wednesday for southern portions of California, Arizona and Nevada, though the hot spell appeared to have peaked on Monday.

Power customers ranging from homes and hospitals to oil refineries and airports are at risk of losing energy at some point this summer because a majority of electric-generating stations in California use gas as their primary fuel.

Since the energy crisis of 2000-2001, the ISO has imposed brief, rotating outages in 2004, 2005, 2010 and 2015, mostly related to unexpected transmission line or power plant failures during periods of unusually high demand.

With California’s largest natural gas storage field shut down indefinitely at Aliso Canyon, state regulators have warned that Los Angeles faces up to 14 days of gas shortages severe enough to trigger blackouts this summer.

Aliso Canyon, owned by Southern California Gas Co, a division of San Diego-based utility giant Sempra Energy, normally supplies the region’s 17 gas-fired power plants, hospitals, refineries and other key parts of California’s economy, including 21 million residents.

The gas leak there, ranking as the worst-ever accidental methane release in the United States, forced thousands of nearby residents from their homes for several months after it was detected last October. The leak was finally plugged in February.

(Reporting by Scott DiSavino in New York; Writing and additional reporting by Steve Gorman in Los Angeles; Editing by Leslie Adler and Andrew Hay)

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