Citi Raises Corn, Soybean, Wheat Price Targets Amid El Niño Risks

Citi's Commodity Outlook Revised

Citi has increased its price targets for corn, soybeans, and wheat. This adjustment follows concerns over a strengthening Super El Niño, identified as a significant agricultural risk extending into late 2026 and early 2027.

El Niño's Intensifying Threat

The National Oceanic and Atmospheric Administration (NOAA) indicates a greater than 90% probability of a very strong El Niño event. There is a 69% chance this event will surpass all El Niño episodes since 1950 during the October-December period, according to NOAA's August 2026 update. Citi noted that current market pricing may not fully reflect the potential downside risks to global agricultural production.

Price Adjustments and Market Impact

Citi revised its 3-month corn price target to $5.40 per bushel and its 12-month target to $5.90. Soybean targets were set at $12.75 (3-month) and $13.25 (12-month). Wheat forecasts increased to $7.25 (3-month) and $7.75 (12-month) per bushel. Commodities most exposed to weather risks include palm oil, robusta coffee, rice, sugar, cocoa, and Australian wheat. Geographically, risks are concentrated in Australia, India, Southeast Asia, and parts of Brazil.

Summary

The bullish outlook for agricultural commodities is supported by multiple factors, including lower yield estimates due to weather, strong export demand, and geopolitical disruptions. An intense El Niño particularly threatens palm oil production, potentially driving up soybean oil and soybean prices. Wheat remains highly vulnerable to combined weather and geopolitical challenges.

FAQ

Q: Why did Citi raise commodity price targets?

A: Citi raised targets primarily due to the strengthening Super El Niño, which poses significant risks to global agricultural production.

Q: Which agricultural commodities are most affected?

A: Corn, soybeans, and wheat had their price targets raised. Other highly exposed commodities include palm oil, robusta coffee, rice, sugar, cocoa, and Australian wheat.

Source: Investing.com