Bank of America Lifts Agricultural Commodity Forecasts on Supply Squeeze

Bank of America has increased its price forecasts for several key agricultural commodities, anticipating tighter global supply conditions in the 2026-27 marketing year. In a research note, the bank pointed to a combination of geopolitical risks, adverse weather, and strong demand as primary drivers for the upward revisions.

Revised Price Targets

Analysts at the bank detailed specific adjustments based on tightening fundamentals for each commodity, with soybeans seeing the most significant increase.

• Soybeans: The price forecast was raised by $1.50 to $13.50 per bushel. BofA cited a tighter U.S. soy balance sheet, driven by lower production prospects, robust crush demand, and solid export potential. The bank noted prices could reach $14.00-$14.50 per bushel if upcoming U.S.-China trade talks generate additional export demand.
• Wheat: The target was lifted to a range of $8.00-$10.00 per bushel, up from $7.70 previously. The revision is based on the ongoing lack of a ceasefire or export agreement in the Black Sea region, making lost volumes increasingly difficult to recover. A de-escalation of conflicts could see prices fall back to $6.00 per bushel, the bank added.
• Sugar: The price target was increased to 20 cents per pound from 17 cents. The bank attributed this to a tighter global sugar balance, reinforced by production losses in Europe, a weaker Asian monsoon, and risks of excessive rain in Centre-South Brazil.

Corn Outlook Tightens Despite Unchanged Target

While Bank of America maintained its new crop corn price target at $5.50-$6.00 per bushel, it highlighted a growing risk to U.S. yields from unfavorable pollination weather. The bank projects the U.S. corn stock-to-use ratio will fall to 8-9%, below the USDA's current projection of 9.7%.

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A stock-to-use ratio below 10% has historically been associated with major bull markets for corn, signaling a significantly tighter supply outlook than the stable price target might suggest.

Geopolitics and Trade Remain Key Factors

Bank of America identified U.S.-China trade relations and geopolitical developments as the primary swing factors for agricultural markets. A failure to secure additional Chinese purchases of U.S. agricultural products would be a significant bearish risk, according to the note.

Conversely, a de-escalation of global conflicts could trigger a broad risk-off move across commodities, potentially pushing prices lower. Investors will be closely watching these developments as key indicators for future price direction.