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Trading Futures - 2016 El Nina - Commodity Impact


Commodity impact on winter of 2016

As a result of El Nino, natural gas has weakened while cocoa and sugar prices have spiked amid warmer-than-expected Northern Hemisphere winters, a drought in West Africa and excessive rains in Brazil.

But with La Nina, grains are vulnerable with bad weather set to diminish output and boost prices.

Emerging La Nina weather extremities presents a bullish case for agricultural products across Asia including sugar, palm oil, and rice, echoed OCBC economists in a note.

Seeing as North American winters are expected to be stronger with La Nina, SocGen recommends investing in natural gas.

Heavy rains in Australia at the same time could also impact the thermal and coking coal markets due to mine flooding, which happened during the La Nina event of 2010-11.

"This could occur again, but in the current environment, increased rainfall in Australia will also likely have an impact on the restocking of cattle and sheep herds," SocGen said.


http://www.cnbc.com/2016/01/14/la-nina-could-happen-3-months-after-el-nino-ends-socgen.html

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