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U.S. Corn Yields and El Nino

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Signs we could enter the peak growing season within an El Nino weather pattern has many in the trade talking about the chances for above trend corn yields.  I read on the internet that all years we have been in an El Nino for the crop season, yields were above trend but that is not the case.  We sum it up with the chart below. 

 

 

(since 1988)ENSO (El Nino) and chance of above trend yields:

 

  • La Nina has a 33% chance (3 of 9)
  • ENSO Neutral has a 42% chance (5 of 12)
  • El Nino has a 50% chance (3 of 6)

 

  1. In the years we have El Nino and yields are good, the avg. deviation is +11.7 bu from trend.
  2. In the years we have El Nino and yields are poor, the avg. deviation is -8.9 bu from trend.

 

So what does it all mean?  We have about a 50/50 chance for a decent weather rally if things continue down the El Nino path this year.  Chances for above trend yields go down to 43% if the El Nino (ENSO) weakens. 

 

Earlier this week, the NOAA released updates stating the likelihood of an El Nino had increased but it does not necessarily say conditions will stay the same on into summer.   In fact, looking back to 2005, ENSO signals started out much the same as this year but faded on into peak summer months, resulting in a sub trend yield that year.  Bottom line is even though things look real good today, chances are good we have a threat to get something sold before harvest.   

 

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