The Effects of El Nino and La Nina Weather Events on Corn Futures Prices

The effects El Nino and La Nina have on corn futures prices is analyzed through the lens of the Southern Oscillation Index (SOI), a measure that indicates El Nino or La Nina weather patterns. Reliable data from 1959 - 2014 is analyzed in both monthly and yearly frequencies. As well as running the data against the SOI, binary indicators for either El Nino or La Nina are used as well. Typically, El Nino is consistent with cooler, wetter over much of North America and La Nina is consistent with hotter, drier weather. Both of these weather patterns will either increase or decrease corn production, which in turn affects corn futures prices