El Nino

Commodity prices, food primarily, have been climbing for several quarters.  Consumer prices haven't felt the impact yet since food companies and supermarkets generally try to keep retail prices steady.  Investors have become attracted to the bullish price chart patterns.  Money has started to pour in to commodity funds.  Bullish positions in the futures markets are high and still on the rise.  Surplus capital created by the U.S. Federal Reserve Board and the Bank of Japan has reinforced the trend.  Commodities represent a large market where new money can easily be put to use.  Unusual weather patterns could reinforce the trend.  Forecasters predict a 70% chance of an El Nino this summer.  That tends to drown crops in some key growing regions and starve it for water in others.  Declining monetary stimulus in the United States and Japan could moderate the effect somewhat.  But it appears the European Central Bank is preparing to pick up the slack on that front.  American farmers usually hit the jackpot when an El Nino occurs.  Australia, South America and, yes, the Ukraine usually are among the areas affected.  Rising prices could lead to riots in underdeveloped countries, particularly those that rely on imports.