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El Nino Is Back-and May Stick Around


This warming of the equatorial Pacific is traditionally observed around Christmas, and its name refers to the Christ child in Spanish. Government forecasters today increased odds the event will develop this winter and last into spring.

This month’s update showed better than 50% odds of El Nino persisting into the June-August period. If it lasts into the fall, U.S. farmers could see above average yields for corn, soybeans and wheat.

Corn and soybean growers fear El Nino’s twin, La Nina, which is the cooling of the equatorial Pacific. These events have been seen during some, but not all, of the big droughts in the U.S.

But El Nino works the other way. Rather than heat and dry conditions, It tends to bring more abundant rainfall and moderate temperatures. El Ninos that develop in the fall or winter are associated with above average winter wheat yields the next summer. If the event starts by summer and lasts into the following fall, chances for above average corn and soybean yields are noted historically.

Still, while traders sometimes like to make a big deal of the El Nino/Southern Oscillation cycle, as it’s known, it’s important to remember that the correlations between this weather event yields, though statistically  significant, is relatively small. Weather is complicated, especially as it relates to crop yields  grown over large regions like the U.S.

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Source: Farm Futures

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