July 15 (Bloomberg) -- Natural gas futures may advance next week on forecasts of hotter-than-normal weather across the eastern and central U.S. through the end of the month, a Bloomberg News survey showed.

Eight of 15 analysts, or 53 percent, forecast that gas futures will rise on the New York Mercantile Exchange through July 22. Four, or 27 percent, said futures will fall and three predicted that prices will stay the same. Last week, 50 percent of participants said gas prices would advance.

Temperatures will probably be above-normal across most of the Midwest, south-central and eastern U.S. from July 19 through July 28, according to MDA EarthSat Weather in Rockville, Maryland. The hot weather may lead to a smaller-than-normal increase in gas inventories, said Jason Schenker, the president of Prestige Economics in Austin, Texas.

"We've had a lot of heat this week, and next week the inventory number is not going to get a holiday bounce," Schenker said. "It's very likely that next week we could see a more bullish injection."

Natural gas for August delivery climbed 17.3 cents, or 4.1 percent, to settle at $4.378 per million British thermal units in the first four days of trading this week on the New York exchange.

Summer Heat

The high temperature in Chicago on July 20 may be 95 degrees Fahrenheit (35 Celsius), 10 above normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in New York may be 92, 7 degrees above normal.

David Fuller's view Natural gas prices in the USA (weekly & daily) have been much lower than the global trend, thanks to the extensive development of shale gas. However, usage is rising and the weekly chart above shows a large, developing base formation.

In my personal portfolio I have introduced an in-the-money trailing stop on this trade which I opened a little prematurely on 29th June.

The heat wave is a major threat to US crops, not least corn and soybeans as today's report from Bloomberg mentions:

July 15 (Bloomberg) -- Soybeans rose, heading for the longest rally since 2007, and corn climbed to a one-month high on speculation that hot, dry weather will reduce crop yields in the U.S., the world's leading exporter.

High temperatures will rise to as much as 12 degrees Fahrenheit above normal for seven days starting tomorrow in the Midwest, Mike Tannura, the president of T-storm Weather LLC, said in a telephone interview. As much as 46 percent of the corn crop and 44 percent of soybeans have drier-than-normal topsoil, and the adverse conditions may extend into August, he said.

"Hot, dry weather will rob yield potential," Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. "The crops are getting smaller, and we don't have any excess inventories to offset the losses."

Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government figures show.

The night time temperatures will be particularly crucial for corn, as we saw last year when heat prevented the sugars from rising and bulking out kernels. Corn prices (weekly & daily) have continued to recover following the USDA's overly optimistic, in my view, report in late June. A downward dynamic is currently required to offset current scope for a further test of previous resistance extending up to $8.

For soybeans (weekly & daily), the current trading range looks more like a continuation pattern than a significant top formation, following a mean reversion towards the rising MA. While some resistance is likely to be encountered near the upper side of this range, if soybeans retain at least half of their recent gains during a pause and consolidation, demand is likely to retain the upper hand.

Rough rice (weekly & daily) has extend its upside breakout, a move that commenced with the daily upside key day reversal on 30th June. After three weeks to the upside this move is beginning to look overextended in the short term but there is now a cushion of probable support commencing near $16 to cushion prices during the next consolidation and this pattern can easily support additional gains over the medium term.