Citi Elevates Grain Targets as Super El Nino Risk Rises

Key Moments

Revised Grain Price Targets

Citi increased its price forecasts for key grain markets on Tuesday, flagging a strengthening Super El Niño as its highest-conviction agricultural risk heading into late 2026 and early 2027.

The bank lifted its targets for corn, soybeans, and wheat across both 3-month and 12-month horizons.

Citi noted that its 3-month soybean price forecast was raised to $12.75 per bushel after the previous target had already been met.

Escalating Super El Niño Risk

The bank’s outlook is anchored in new projections showing a materially higher risk from the developing Super El Niño. Citing the agency’s August 2026 update, Citi pointed out that the National Oceanic and Atmospheric Administration (NOAA) now assigns a greater than 90% probability of a very strong El Niño event, and a 69% probability that the event exceeds the strength of all El Niño episodes since 1950 during the October-December period.

Citi argued that current market prices incorporate only part of the potential downside to global agricultural production. This assessment is based on its new Production-at-Risk framework.

Most Weather-Exposed Commodities and Regions

According to Citi, the commodities most vulnerable to adverse weather outcomes include palm oil, robusta coffee, rice, sugar, cocoa, and Australian wheat. The bank said risks are geographically concentrated across Australia, India, Southeast Asia, and parts of Brazil.

Citi also emphasized that a strong El Niño constitutes a significant threat to palm oil production in Indonesia and Malaysia. In its view, weaker palm oil output could increase demand for soybean oil and, in turn, support higher soybean prices through larger crush demand.

Multiple Bullish Drivers for Agricultural Markets

Citi stated that the bullish scenario for agricultural commodities “is increasingly supported by multiple independent catalysts” including lower yield estimates due to weather and El Niño, strong export demand, Black Sea disruptions, fertilizer and energy prices, and biofuel demand globally.

The bank singled out wheat as the grain most sensitive to the combined impact of weather and geopolitical risks. It noted that recent hot and dry conditions across Europe have already led to reductions in wheat production estimates.