⚡ EL NIÑO PHASE — SUPPLY SHOCK
ENSO FORCING
El Niño → S. America Drought
Brazil/Argentina precipitation -20 to -40% during El Niño
↓
CROP IMPACT
Soy crop failure — -8% to -18% yield
Brazil: 153M MT → 130M MT. Argentina: -6M MT
↓
GLOBAL SUPPLY SHOCK
Soybean price +25-40%
CBOT soybean futures: $10 → $14-$17/bushel
🌿 LA NIÑA PHASE — RECOVERY
ENSO REVERSAL
La Niña → S. America wet
Precipitation +15 to +30% above average — bumper crop conditions
↓
BUMPER CROP
Record yields → price floor compression
Brazil record: 163M MT. Argentina 56M MT. Global supply flood
THE CYCLE TRADE
LONG soy at El Niño onset (before drought confirmation)
CLOSE long at La Niña onset (before bumper crop
hits price)
Timing window: 6-12 months from ENSO phase confirmation to price floor
📊 FINANCIAL STRUCTURE
LONG ENTRY
El Niño onset confirmed
ONI > +0.5 for 3+ consecutive months → ENSO alert → soy futures long
↓
PRICE ACTION
Staircase up → supply shock priced in
6-12 month run from drought confirmation to price peak
↓
CLOSE SIGNAL
La Niña onset → close long
ONI < -0.5 for 3+ months → S. America precip recovery → floor compression incoming
↓
FLOOR CONFIRMED
Bumper crop → soy $8-$10/bu floor
Supply overhang suppresses price for 12-24 months (La Niña accumulation)
💎 STRONG · FLOOR CONFIRMED
La Niña recovery in progress. Bumper crop 2024 confirmed.
CBOT soybean at floor:
~$9.50-$10.20/bu
Diamond signal: STRONG (floor confirmed by supply data)
Trade:
Watch for El Niño return → next long setup
Related instruments:
SOYB (ETF), ZS (CBOT futures), ADM, BG, AGRO
γ₁ = 14.134725141734693