El Niño Risk Rises Heralding More Commodity Price Volatility

Yeah, it’s risen to a definite “maybe”, with a chance of “perhaps”. Then again it could stay ENSO neutral or even drift back to La Niña.

Latest forecasts from the US Climate Prediction Center and the Australian Bureau of Meteorology indicate that climate conditions continue to shift towards El Niño later in 2012. The weather phenomenon results in warmer waters in the Pacific increasing the risk of rain impacting crops in key agricultural regions while also reducing the incidence of tropical storms in the US Gulf, a key oil producing region.

El Niño is a warming of sea surface temperatures in the equatorial Pacific that occurs every 4 to 12 years. El Niño events have occurred in 2002/03, 2004/05 and 2009/10.

Forecasters have found that the number of warm spots across the central Pacific has grown. El Niño type conditions often form several months before it is officially declared suggesting that current observations may result in an El Niño forming by September.

OilPrice

The El Niño Southern Oscillation is extremely important to Australia, driving our perpetual drought/flood cycle. We were always taught to expect El Niño events every 2-7 years. Where did the above 4-12 come from? Is that how frequently it is strong enough to severely affect US mid- and south-western grain growing and livestock grazing? Curious.

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