![]() It has been driven by extreme hot and dry weather leading to drought conditions in key states. Pulling this all together, I am looking to fade the recent move higher in futures. However, if the El Niño produces the cooler and wetter weather across the Southern US that is expected, what impact would this have on Feeder Cattle futures prices that are so high because of the persistent drought conditions in critical feeder cattle states? ![]() In the August 1 USDA cattle on feed report, placements of feeder cattle were down 8% and at the lowest level since 2017. El Niño winters also bring better chances for warmer than average temperatures across the northern tier of the country.” Typically, moderate to strong El Niño conditions during the fall and winter result in wetter than average conditions from southern California to along the Gulf Coast, and drier than average conditions in the Pacific Northwest and Ohio Valley. By winter, there is an 84% chance of greater than a moderate strength El Niño, and a 56% chance of a strong El Niño developing. is weak during the summer and more pronounced starting in the late fall through spring. For example, El Niño could lead to new records for temperatures, particularly in areas that already experience above-average temperatures during El Niño.”Įl Niño’s influence on the U.S. ![]() "Climate change can exacerbate or mitigate certain impacts related to El Niño. "Depending on its strength, El Niño can cause a range of impacts, such as increasing the risk of heavy rainfall and droughts in certain locations around the world," said Michelle L'Heureux, climate scientist at the Climate Prediction Center. Thus, prices could stay higher through the October time frame, which is a critical period as supplies will remain tight at the same time they are expected to peak seasonally. is weak over the summer but more pronounced starting in late fall and through the spring. In fact, the NOAA says that while the El Niño has been expected since April, its influence on the U.S. However, according to forecasters at the NOAA, an El Niño is still expected to hit the U.S., with a 95% chance it hits in January through March.
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