Chance weather phenomenon increases
Cereal market is prepared for La Niña
The 2 main meteorological agencies from the United States and Australia warn of an increasing chance of the weather phenomenon La Niña. This may have an impact on the global grain market. Still, experts don't think it's going that fast. The market is armed with huge stocks.
The well-known weather phenomenon El Niño caused the water temperature in South America to warm up. In combination with a change in the air currents, this results in heavy rainfall or, conversely, drought. Its counterpart, La Niña, actually ensures that the temperature in the Pacific Ocean is lower than average. The result is drought in South America and extreme rainfall in Australia. The US will also be faced with a drought.
Inventories depress pricing
US meteorologists from NOAA estimate the probability of La Niña at 55% to 65%. That is why vigilance is required. "It's something to keep an eye on, but the probability calculation does not mean that La Niña will actually come," Stefan Vogel, of Rabobank in London, told the newspaper. Financieele Dagblad† Vogel is head of agricultural commodities. "Thanks to good harvests from the past, a lot of grain and soy is stored. If prices rise, farmers are inclined to offer these products, which in turn depresses prices."
Niels van der Boom
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