La Nina weather cycle is likely to have a profound effect on the prices of wheat and maize.

06-Aug-2024 03:34 PM

Chicago. Although there has been no formal announcement of the onset and arrival of the La Nina weather cycle so far,

but looking at the situation of El Nino Southern Oscillation (EINSO), it seems that La Nina may form soon and it can play the role of a catalyst for the rise in the global market price of wheat and maize. At present, the prices of both these important food grains are soft.

According to a leading rating agency, the price of wheat and maize in the global market has come down to the lowest level in about four years.

The phase of rise and strength in its prices can start only when there is an indication of a huge fall in the global production of either wheat or maize.

La Nina can play an important role in this. Due to this weather cycle, heavy rains are expected in Asia but a serious crisis of drought also arises in many other parts of the world.

Wheat prices are under pressure due to excellent production in the Northern Hemisphere, while maize prices are softening due to strong supply of new goods from the Southern Hemisphere.

Although maize production in countries like Brazil and Argentina is likely to be less than expected, but the pressure of supply will not allow the market to rise much.

The benchmark futures price of wheat at the Chicago Board of Trade (CBOT) has currently come down to $ 5.24 per bushel ($ 192.53 per ton) and the futures price of maize has come down to $ 3.80 per bushel ($ 149.59 per ton).

The price of both these commodities is currently running more than 20 percent down compared to last year.

Earlier in the 2022-23 season, when the La Nina weather cycle was prevalent, wheat production in the US fell by 9.5 percent and maize production by 9.1 percent compared to last year.