Australia's weather bureau said the easing in the SOI was only temporary due to a high pressure system near Tahiti or what meteorologists call "weather noise".

"We are fairly confident, given ocean conditions, the SOI will unfortunately start to fall fairly soon. In fact, the latest daily value has started dropping again," said Watkins.

"There is still a clear warming trend nothing has really eased back in the main indicators."

Australia's weather bureau said India's monsoon, the lifeblood of the country's huge farming sector, will likely remain weak according to the Madden-Julian Oscillation index, which gauges the eastward progress of tropical rain.

India's monsoon rains have now covered all of the country, but the country's Meteorological Department said last week that as of July 1, rains were 29 percent below normal.

India's farm economy may be hit by a bad drought if the monsoon remains weak, with the window for plantings closing by mid-July, says a U.S. Agricultural Department attache report.

RUBBER, WHEAT

A brewing El Nino may further dent shrinking rubber supplies in Southeast Asia and keep prices high at a time when demand is struggling to recover from the global financial crisis.

A developing El Nino is also a major risk to wheat production in Australia, but is unlikely to have a material impact on global wheat prices, said Rabobank, a specialist in agribusiness, earlier in the week.

Strong northern hemisphere production would help to make up for any shortfall from Australia in the event of El Nino reducing the harvest in the world's fourth-largest exporter, it said.

... contd.