Citi Raises Corn, Soybean and Wheat Price Targets as El Niño Risks Intensify

Analysts at Citi have announced an increase in price forecasts for corn, soybeans, and wheat, identifying the intensification of a 'super' El Niño as the highest-conviction risk for agricultural markets heading into late 2026 and early 2027. According to the bank, rising concerns stem from the possibility that increasingly severe weather conditions could disrupt agricultural production in critical regions, potentially tightening global supplies and fueling a climb in market prices.

The bank's assessment is underpinned by NOAA's August 2026 update, which assigns a probability of more than 90% to a very strong El Niño event. Furthermore, experts estimate a 69% probability that weather conditions during the October-December period will exceed the strength of every El Niño episode recorded since 1950. Citi emphasizes that current commodity prices may not yet fully account for the potential production losses associated with such an unusually powerful climate event.

Under the revised outlook, the three-month price target for corn is set at $5.40 per bushel, with a 12-month target of $5.90. The soybean forecast has also been lifted to $12.75 for the short term and $13.25 for the long term. Wheat is projected to reach $7.25 per bushel in three months and $7.75 within a year. The bank is utilizing a 'Production-at-Risk' framework, which highlights the heightened susceptibility of global agricultural output.

Beyond the weather factor, the market is contending with multiple overlapping threats. These include declining yield expectations, robust export demand, geopolitical instability around the Black Sea, and escalating costs for fertilizers and energy. Commodities identified as particularly exposed, besides grains, include palm oil, robusta coffee, rice, sugar, and cocoa. Geographically, risks are most concentrated across Australia, India, Southeast Asia, and parts of Brazil.

Significant attention is focused on the spillover effect for the soybean market. Citi experts expect that a potential shortfall in palm oil production in Indonesia and Malaysia could increase demand for soybean oil as a viable alternative. This would logically boost soybean crushing volumes, providing additional upward pressure on the underlying crop prices. Coupled with broader weather-related vulnerabilities and ongoing geopolitical volatility, particularly in the wheat sector, the bank expects agricultural markets to remain susceptible to further price hikes throughout the coming months.