The resurgence of El Nino should be good for South American soybeans, bad for Asian palm oil and produce a mild Prairie winter.
When the El Nino weather phenomenon officially affived in July, it was classified as weak but was expected to become moderate and persist through the winter of 2009-10.
But farmers didn’t see the traditional El Nino weather patterns.
“El Nino really got pretty weak and wimpy,” said Drew Lerner, president of Kansas-based World Weather Inc.
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“It just wasn’t anything to write home to Mom about.”
Areas supposed to be dry were wet and vice versa. But the latest data says El Nino is gathering strength.
That means drier than usual conditions in Indonesia and Malaysia, where palm oil is produced, and wetter than usual conditions in Brazil and Argentina, home to much of the world’s soybean crop. Canadian canola oil prices are heavily influenced by palm and soybean prices.
Lerner said the El Nino was muted because the warming of the Pacific Ocean occurred on the west side of the International Date Line instead of the east. But lately, warm water has worked east towards South America.
In a Nov. 11 report, the Australian Bureau of Meteorology said the sea surface has warmed in central and eastern areas of the Pacific, “with a typical El Nino pattern clearly present.” The water has warmed to a level not observed since the 2002 El Nino.
Prairie farmers benefited from this. A reinvigorated El Nino helped warm the Prairies, allowing the harvest to finish. The drier and warmer conditions should persist to the end of February, but that doesn’t rule out cold spells, Lerner said.
Palm oil producers in Malaysia and Indonesia should brace for the yield-sapping heat normally associated with the weather event. Those countries have already seen less rain.
South America’s recently planted soybean crop faces a mixed bag of weather. Brazil is wet prompting pathologists to forecast a rust outbreak. Oil World predicts 63 million tonnes of Brazilian soybean production in 2010. Argentina is still dry and Oil World shaved its estimate to 50 million tonnes.
