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The IRI October 2018 ENSO Quick Look reports that sea surface temperatures in the central tropical Pacific have warmed to weak El Niño levels. The official CPC/IRI outlook gives a 70-75% chance of El Niño forming in October/November and persisting through winter 2018-19.
Rising odds of El Niño raise the risk of dry weather in Australia, Southeast Asia and parts of South America, which can tighten palm oil, sugar and grain supplies. Markets may price in some supply risk ahead of the event.
iri.columbia.eduOct 19, 2018After 181 past bullish weather events, Palm Oil moved a median +0.5% over 5 sessions (56% higher; middle half -0.9% to +1.9%), and +0.3% over 20.
After 1,465 past bullish weather events, Corn moved a median +0.2% over 5 sessions (54% higher; middle half -1.4% to +1.9%), and +0.9% over 20.
After 1,079 past bullish weather events, Soybeans moved a median +0.3% over 5 sessions (54% higher; middle half -1.4% to +2.0%), and +0.9% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
