Super El Nino Fears Drive Up Grain Prices Amidst Weather Anxiety

Weather anxiety is driving up grain prices as concerns about a Super El Nino weather pattern grow. The 'elephant in the room' for commodity markets this summer is the potential impact of warmer surface temperatures in the Pacific Ocean on crop production. An El Nino typically causes hotter and drier growing conditions in northern and central Brazil, where soybeans are a major crop.

However, it's not just South America that's at risk. Australian wheat production is also threatened by a potential 20% decline in yields due to the Super El Nino. The news has sparked interest in buying wheat now, even if the actual impact of the weather event may be mild.

The grain and oilseeds markets seem to be trading on anxiety rather than actual weather forecasts. Prices have already risen substantially as traders worry about potential problems that might develop.