What if a new El Nino drought chokes the Panama Canal?
A fresh El Nino drought cutting Panama to 18 transits reroutes US Gulf grain and LNG the long way, lifting freight and a modest Brent premium plus CBOT wheat/corn on logistics, not a true oil-supply shock. Rhymes with the 2023-24 Panama drought that slashed transits to ~22 and spiked Asia-bound freight without a lasting crude rally. The US Gulf is the affected exporter to Asia/EU; the forward angle is oil_supply_risk is overstated - this is a shipping/cost and grain-logistics event, so crude's +1.8% should fade as cargoes reroute via Suez/Cape.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. A fresh El Nino drought slashes Panama daily transits to 18, rerouting US grain and LNG around Cape Horn for months. The trigger decomposes into signed root‑shocks — Climate/crop supply ▲ · Inflation surprise ▲ · Food inflation ▲ · Diesel ▲ — which propagate through our causal graph to the markets below.