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October 29, 2018

El Nino Correlates with above Average Yields in Santa Fe, Argentina

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Commercial Exchange of Santa Fe, Argentina published a study last week looking at the correlation between El Nino years when the water in the Pacific Ocean is warmer than normal and La Nina years when the water in the Pacific Ocean is colder than normal and soybean yields in the province over last 44 years. They categorized the soybean yields as either below average, average, or above average. They conducted the study because it is likely that there will be a weak or mild El Nino during the current South American growing season.

Their analysis showed that lower than average soybean yields were recorded 60% of the time during La Nina years and 30% of the time during El Nino years.

Above average soybean yields were recorded 70% of the time during El Nino years and 30% of the time during neutral years with a very low occurrence of above average yields during La Nina years. In all cases, the correlation was stronger when the water temperatures were extreme, either one way or the other.

The bottom line is that if there is a mild El Nino in the Pacific Ocean during the South American summer months (which is the current forecast), there is an increased chance of above average soybean yields in the province of Santa Fe. Conversely, if there is a mild La Nina during the South American summer months, there is an increased chance of below average soybean yields in the province of Santa Fe.

Santa Fe is in the heart of Argentina's main grain producing region, so it would be reasonable to assume these results could be extrapolated to most of Argentina's main grain production region.