Chances of an El Niño weather event developing this year at 70%

• On Monday, we painted a somewhat optimistic picture regarding the weather outlook this year, basing our opinion on the South African Weather Service’s report which indicated a possibility of above-normal rainfall over most parts of the summer crop growing areas between November 2018 and January 2019, with a chance of dryness later in the summer season due to an expected El Niño.
• At the time, this view was in line with the Australian Bureau of Meteorology. However, yesterday the Australians placed the chances of an El Niño weather event developing this year at 70 percent, up from the previous estimate of 55 percent. This suggests that there is a higher chance of that the 2018/19 maize production season, which opened at the beginning of this month, could experience dryness.
• It is still unclear whether South African farmers will reduce the intentions to plant because of this forecast. However, we will have a better indication when the Crop Estimate Committee releases the ‘farmers’ intentions to plant’ data for the 2018/19 production season on 25 October 2018.

Click HERE to view the full report. 

Sourced: Agbiz Morning Market Viewpoint on Agri-Commodities