Futures Close Report: 21st November 2017

Australia’s Bureau of Meteorology has issued an alert for a La Niña weather event starting next month, saying the chance it would take place was 70% probable. The weather occurrence La Niña is triggered when sea surface temperatures in the central Pacific Ocean drop to lower-than-normal levels. It generally implies stormier and cold winters in Asia’s northern hemisphere and warm but wet summers in the southern hemisphere.  While a La Niña, tends to be less damaging than the corresponding El Niño which occurs when there are warmer waters in the Pacific, a strong event can have a severe impact on agricultural and commodity markets.

Shipments of U.S. corn during the season that started on 1st September totaled 6.6 million tonnes as of 16th November, down from 11.7 million tonnes during the same time period in 2016 according to US export data.  US exporters already struggling to compete on a global market are further beset by stocks of wet corn after the slow and wet harvest.  This will require further drying increasing costs on an already depressed export market potential.