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In recent months, both Australian and U.S. meteorological officials have pointed out the possibility of an El Niño weather pattern setting up in the Pacific Ocean. As we recently noted, El Niño is a pattern which increases rainfall in certain parts of the globe and decreases it in others. Meteorologists believe that there is a 65 percent probability of El Niño developing by July 2014.

Historically, El Niño has had big effects on commodity prices -- primarily nickel, copper, and food prices. Nickel has already risen, because even before an El Niño event, Indonesia has curtailed shipments from its mines. Indonesia is the world’s largest producer, and much of its production is created using hydropower -- so an event could send nickel prices higher. As readers know, nickel is an important component of steel production. On the other hand, copper production could be impeded by an excess of rain in Chile’s mountains, making copper mining and transportation more difficult.

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El Niño usually increases rains in California, eastern China, and the U.S. sunbelt, and decreases rains in India, northern Brazil, Indonesia and Australia.

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