As the global weather phenomenon known as El Niño comes to an end and is forecast to be replaced by its opposite La Niña later this year, it is worth looking at examples of what the former has wrought and what the latter may have in store.
Most meteorologists agree El Niño, the warming of Pacific Ocean currents that impact weather patterns globally, will come to an end in the next couple of months. It was considered one of the strongest El Niños in history and had considerable impact on global weather patterns and crop production.
Such major grain and oilseed crops as wheat, corn and soybeans grown in temperate climates tended to do well during El Niño, resulting in record-large global wheat supplies and rising corn, soybean and soybean oil stocks. El Niño brought adequate if not ample moisture to most major growing areas in the midsection of the United States last year.
Crops grown in less temperate regions such as palm oil and sugar cane tended to not fare as well. Palm oil production in the current year in Southeast Asia is forecast to drop by more than 5%, with top-producing Indonesia expecting its first decline since 1998 and No. 2 Malaysia its sharpest drop since that year. Bursa Malaysia palm oil futures recently hit two-year highs. Price gains, though, are expected to be limited as users switch to other vegetable oils, including soybean oil, global supplies of which are forecast by the U.S. Department of Agriculture to be record high this year, due in part to strong soybean production aided by El Niño.