July 24 (Bloomberg) -- Indicators of an El Nino event strengthened, with climate models showing the weather pattern will form this year, threatening to parch Asia and Australia as dry conditions wither crops from the U.S. to Europe.
El Nino-Southern Oscillation observations show a resumption of warming across the central tropical Pacific Ocean, Australia’s Bureau of Meteorology said on its website today. The bureau said last week that indicators had eased slightly, while remaining near the threshold for the weather condition.
El Ninos are caused by the periodic warming of the Pacific, while their reverse, La Ninas are indicated by a cooling of surface waters. The patterns effect weather worldwide and can roil markets as farmers contend with drought or battle too much rain. The worst drought since 1956 in the U.S. drove corn and soybeans to records yesterday as heat waves in southern Europe wither crops. In the next three months, parts of Australia, the second-biggest wheat exporter, will be drier-than-normal.
“Climate models continue to suggest that El Nino will form this year,” the bureau said. Forecasters from Malaysia to the U.S. have also predicted the weather event will form in 2012.
The U.S. drought may spark a rebound in global food prices from this month through October, halting a slide that sent costs in June to the lowest in 21 months, Abdolreza Abbassian, an economist in Rome at the United Nations’ Food & Agriculture Organization, said on July 5.
Corn reached $8 a bushel and soybeans $16.915 a bushel on the Chicago Board of Trade yesterday. Wheat advanced to $9.4725, the most expensive since August 2008.
About 26 percent of the U.S. corn crop was in good or excellent condition as of July 22, down from 31 percent a week earlier, according to the U.S. Department of Agriculture. An estimated 31 percent of the soybeans got the top ratings, down from 34 percent. The assessments are the worst for both the crops for this time of the year since a drought in 1988.
El Nino events are typically associated with drier conditions across large parts of eastern Australia. Most of the country’s grain-growing regions are set to be drier-than-normal from August to October, the Bureau of Meteorology said July 18.
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