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DAVID KRUSE

By Staff | Mar 6, 2015

I asked Iowa State University Climatologist Elwynn Taylor why fewer weather watchers appear to follow the Southern Oscillation Index to track El Nino and La Nina patterns.

The 90-day SOI was at a solid El Nino -8, yet many weather services were still not committed to an El Nino.

Taylor said National Oceanic of Atmospheric Administration tracks an El Nino purely on Pacific water temps and the SOI is specific to our weather in this region representing the Corn Belt. The air pressure represented by the SOI, not water temperature, determines the weather in the Corn Belt two-thirds of the time.

The 90-day SOI has fluctuated slightly below -8 which Taylor said is close enough to qualify. That is because it was he who picked -8 as the numerical SOI benchmark for an El Nino and he contends -7.6 or -7.8 are close enough – splitting hairs.

There is nothing magical about -8 which Taylor said he guessed at, believing an El Nino ranges from -6 to -10 SOI. There has been something magical about an El Nino as we have never had a below-trend line yield when the El Nino Southern Oscillation was in El Nino territory.

Taylor expects an above trend-line yield this crop season targeting 171 bushels per acre and if the El Nino proves persistent, lasting through spring, that would go up to 175 bpa. We tend to have our poor yields when the ENSO is above a +8 90-day SOI representing La Nina. U.S. Department of Agriculture released its baseline yield expectations last week and Taylor said that they have been correct only four times since they have been doing this beginning in 1964.

USDA bases its yield forecast on average weather and Taylor said that the weather has only been average four times. When there is El Nino, we have a 70 percent chance of an above trend-line yield and the exact opposite odds for a below trend-line yield during a La Nina according to Taylor. This indicator has never been wrong since 1983. An El Nino would benefit crop prospects this year, but there should be more production risk in 2016 when it is likely that this El Nino period will have retreated.

There have been alternating periods of stable yields and erratic yields with extremes both good and bad, said Taylor. We have entered the erratic period so when this El Nino fades, the wolves will come out. Taylor said that our winters are influenced by the Atlantic Oscillation Index and that it has moved into the point in its cycle when we can expect tougher winters as seen in the 1950s, like being seen in Boston, where they are setting records this winter.

I had surmised that the nitrate problem being experienced by the Des Moines Water Works that has led to lawsuits against drainage districts in their watershed was being influenced by climate change and Taylor appeared to concur. We are getting more annual rainfall coming in more intense storms.

Taylor says that there are weather records going back to the 1890s and that the number of price days has doubled since then. We have seen total precipitation increase by 20 percent since the 1890s and 10 percent since the 1950s. South Dakota annual precipitation has doubled since the 1890s. That was enough to double the amount of water going down Iowa Rivers sending water over river banks six times as often. What constituted a 100 year flood in 1950 now occurs every 17 years.

You can’t fix Gulf hypoxia or dimness water quality problems caused by climate change with litigation. Quite naturally and logically farmers responded to more rain and floods by investing in more field tiles to drain soils to keep them productive. We would rather drain water through soils than over them. Buffers and other conservation measures should be expanded but nitrates are soluble and water is going to move them. There is no regulatory solution to this that makes sense.

Another climatologist that I respect is Art Douglas, professor emeritus at Creighton University. Douglas said that the El Nino should persist and crop and pasture conditions should remain favorable although likely not as good as a year ago. He sees drought building in the Southeast and easing in the West. He sees below normal temperatures for the Midwest in the summer at least until August. Given the high subsoil moisture reserves that we have to start the season and cooler temperatures limiting stress, that would be a very favorable forecast for the corn crop. That would back up Taylor’s 171-175 bpa yield target.

Farmers have a chance yet to shake up the game and justify a weather premium by reducing corn planting intentions but why would they do that given the new crop premium that is structured in the market? If they did reduce corn acreage by 2 million acres they would add them to soybeans which would add a couple nails to that market’s coffin. To get a bullish corn acreage planting intentions report number you will get a bearish report for soybean acreage. There is enough acres to produce too much of everything so to reduce acres enough to help one crop’s balance sheet you have to destroy another’s.

The biggest take home from the recent USDA outlook forum was that with unrealistically low soybean acreage and an average yield the soybean carryover still grew larger. That says that supply has now reached a point where demand is satisfied . . . saturation. Higher acreage and the kind of growing season that Taylor and Douglas expect would make the soybean carry-over a very ugly number.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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