Markets brace for El Niño, which has historically led to higher food prices


U.S. government forecasters predict a more than 65% chance for an El Niño weather phenomenon by the end of the year, a development that threatens to drive up prices for food and other staples.

El Niño has a reputation for triggering sharp run-ups for prices in markets as diverse as nickel, coffee and soybeans, and commodities investors, traders and analysts are bracing for impact at a time when global supplies of many raw materials already are stretched.

Global food prices - which at the start of 2014 were expected to be largely flat this year - could easily climb 15% to record highs in as a little as three months after an El Niño occurs, says World Bank economist James Baffes.

But Société Générale analysts say it is miners, not farmers, who have the most to worry about; since 1991, nickel prices rose the most (13.9%) during El Niño years among commodities the bank tracks.

ETFs: DBA, CORN, DBC, JO, JJC, RJA, JJG, WEAT, SOYB, DJP, SGG, DBB, COW, NIB, GSG, RJI, CAFE, BAL, GCC, DAG, USCI, JJA, GRU, CHOC, CANE, JJN, RGRA, AGA, JJT, RGRC, CPER, AGF, GSP, BOM, RJZ, JJU, GSC, LSC, FUD, DJCI, USAG, BOS, SGAR, JJM, DEE, BDD, UCI, LD, WEET, UAG, DYY, DIRT, BCM, CMD, DDP, NINI, JJS, CTNN, TAGS, UBC, CUPM, FOIL, UCD, ADZ, RGRI, LEDD, UBM, CMDT, BDG, SBV, USMI, DPU, LSTK, CSCB, GRWN, HEVY, CSCR

From other sites
Comments (5)
  • jj1937
    , contributor
    Comments (4103) | Send Message
     
    Where is El Nino. Pray for El Nino.
    13 Oct 2014, 10:11 PM Reply Like
  • JackWolf
    , contributor
    Comments (555) | Send Message
     
    The probability of an El Nino is now greatly reduced. Instead we will see continued drought situations in TX, OK, CA, NM, Mexico, etc. Already the government has indicated that wheat plantings will be down in 2015. With Saudi Arabia eliminating their wheat production in its entirety, Russia and the Ukraine holding on to its grain, and pests increasingly an issue in the NW and Canada, ag commodities are looking increasingly attractive.
    26 Jan 2015, 03:03 PM Reply Like
  • Morganf86@yahoo.com
    , contributor
    Comments (144) | Send Message
     
    So jack. You say no and the article says yes. So which is it. Are you sure the drought in tx ok etc is not related to El Niño
    24 Apr 2015, 11:44 AM Reply Like
  • Morganf86@yahoo.com
    , contributor
    Comments (144) | Send Message
     
    Well I researched it and it appears jack is off. Here is the deal.
    In December 2014, the Japan Meteorological Agency had declared the onset of El Niño conditions, as warmer than normal sea surface temperatures were measured over the Pacific, albeit citing the lack of atmospheric conditions related to the event.[37] Months later, on March 2015, the Climate Prediction Center had declared the arrival of El Niño condition
    So it's here and article is out of date. So the question I have is how will this effect coffee
    24 Apr 2015, 11:56 AM Reply Like
  • BunnyColvin
    , contributor
    Comments (39) | Send Message
     
    Since then, we've also seen almost half of the country's poultry market wiped out due to avian flu and the price of eggs almost double. Factory farming risks are high and black swan catalysts like this one will become more frequent.
    12 Jun 2015, 04:10 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs