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Citi Boosts Corn, Soybean, and Wheat Price Targets on 'Super El Niño' Threat
Summary
Citigroup raised its price forecasts for key agricultural commodities, warning that markets are underpricing the production risks from a potentially historic El Niño event.
Citigroup has raised its price forecasts for corn, soybeans, and wheat, identifying a strengthening "Super El Niño" as the most significant risk to agricultural markets heading into late 2026 and early 2027. The bank's analysts believe current market prices do not fully account for the potential disruption to global crop production.
Revised Price Forecasts
In a note to clients, Citi outlined its updated price targets for the major grains, reflecting the heightened weather-related risks. The bank's new 3-month and 12-month forecasts are as follows:
- Corn: 3-month target raised to $5.40 per bushel and 12-month target to $5.90 per bushel.
- Soybeans: 3-month forecast lifted to $12.75 per bushel, with a 12-month target of $13.25 per bushel.
- Wheat: 3-month target increased to $7.25 per bushel and 12-month target to $7.75 per bushel.
El Niño Seen as Primary Catalyst
The upward revisions are underpinned by meteorological data suggesting a severe weather event. Citi highlighted an August 2026 update from the National Oceanic and Atmospheric Administration (NOAA) which now assigns a greater than 90% probability of a very strong El Niño. The agency also projects a 69% probability that the event will surpass the strength of all episodes recorded since 1950 during the October-December period.
AdBased on its proprietary "Production-at-Risk" framework, Citi concluded that the market has only priced in a portion of the potential downside for global agricultural output. The bank noted that the most weather-exposed commodities include palm oil, robusta coffee, rice, sugar, cocoa, and Australian wheat.
Broader Market Implications
Geographically, Citi sees production risks concentrated across Australia, India, Southeast Asia, and parts of Brazil. A strong El Niño could severely impact palm oil production in Indonesia and Malaysia, which in turn could create a significant pull for soybean oil, boosting crush demand and supporting soybean prices.
Beyond El Niño, Citi said the bullish case for grains is supported by several independent factors, including strong export demand, disruptions in the Black Sea region, elevated fertilizer and energy costs, and growing demand for biofuels. The bank specifically identified wheat as the grain most exposed to the combined effects of adverse weather and geopolitical risks, noting that hot, dry conditions have already reduced European production estimates.
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