Citi Lifts Grain Price Targets on 'Super' El Niño Threat

Citigroup raised its price targets for corn, soybeans, and wheat on Tuesday, identifying the escalating risk of a 'super' El Niño as the most significant agricultural risk heading into late 2026 and early 2027.

The bank stated that current market pricing appears to reflect only a fraction of the potential downside risk to global agricultural production, according to its new "production risk" analysis framework.

Price Forecasts Raised

In its report, Citi revised its short- and long-term price targets for the key grain commodities. The bank noted that the previous price target for soybeans had already been met, prompting the upward revision.

• Corn: 3-month target raised to $5.40 per bushel; 12-month target to $5.90 per bushel.
• Soybeans: 3-month target raised to $12.75 per bushel; 12-month target to $13.25 per bushel.
• Wheat: 3-month target raised to $7.25 per bushel; 12-month target to $7.75 per bushel.

El Niño Strength a Key Concern

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Citi's warning is supported by an August 2026 update from the U.S. National Oceanic and Atmospheric Administration (NOAA). The agency forecasts a greater than 90% probability of an "extremely strong" El Niño event occurring between October and December.

Furthermore, NOAA data indicates a 69% probability that the intensity of this event could surpass all other El Niño events recorded since 1950. Such a powerful weather phenomenon poses a significant threat to crop yields in key producing regions, including Australia, India, Southeast Asia, and parts of Brazil.

Multiple Bullish Factors

Beyond the El Niño threat, Citi pointed to several independent factors supporting a bullish outlook for grains. These include lower yield estimates from adverse weather, strong export demand, supply disruptions in the Black Sea region, rising fertilizer and energy costs, and growing global demand for biofuels.

The bank highlighted that a severe El Niño could disrupt palm oil production in Indonesia and Malaysia, which would likely increase demand for soybean oil and, in turn, drive up soybean prices. Wheat was identified as the grain most exposed to a combination of weather and geopolitical risks, with recent heat and drought in Europe already leading to downward revisions in production estimates.