According to Australia's Bureau of Meteorology, this year looks set to see the most pronounced El Niño weather phenomenon since 1997 and 1998. Normally this is accompanied by dry conditions and even drought in large parts of the Australian continent, with correspondingly high wheat crop outages. Between 1997 and 1998, the Australian wheat crop declined by nearly 4 million tons, though this is unlikely to happen this year because there has been such plentiful rainfall in the Australian wheat-growing regions of late that sufficient soil moisture levels should be ensured, says Commerzbank.



Wheat prices find themselves under pressure accordingly. The CBOT price dropped for a time to 475 US cents per bushel yesterday and once again neared the five-year low it hit in May before prices began to recover in the late course of trading in the slipstream of the oil price rally.