Citigroup raised price targets for U.S. corn, soybeans and wheat on Tuesday, citing intensifying risks from a potential Super El Niño that could disrupt global agricultural output through the end of 2026.
The bank set a three-month target of $5.40 per bushel for corn, up from prior levels, and a 12-month target of $5.90 per bushel. Soybeans were assigned a three-month target of $12.75 per bushel and a 12-month target of $13.25 per bushel, following a revision after the previous target was met. Wheat targets were lifted to $7.25 per bushel for three months and $7.75 per bushel for 12 months.
The upgrades reflect a strengthening El Niño event, with the U.S. National Oceanic and Atmospheric Administration (NOAA) estimating a greater than 90% probability that the phenomenon will reach very high intensity between October and December. There is a 69% chance it could surpass the strength of all recorded El Niño episodes since 1950 during that period, NOAA said in an August update.
Citi’s new Production Risk Model indicates that current market prices understate potential downside risks to global agricultural production, particularly for weather-sensitive crops. The commodities most exposed include palm oil, robusta coffee, rice, sugar, cocoa and Australian wheat, with risks concentrated in Australia, India, Southeast Asia and parts of Brazil.
Analysts highlighted additional bullish factors such as lower yield expectations due to adverse weather, strong export demand, disruptions in the Black Sea region, elevated fertilizer and energy costs, and rising global biofuel demand. Wheat was singled out as the grain most vulnerable to the combined impact of climate and geopolitical pressures, with recent heat and drought in Europe already weighing on production estimates.
The El Niño event is also expected to pressure palm oil output in Indonesia and Malaysia, potentially increasing demand for soybean oil as an alternative and lifting soybean prices through higher crushing margins.
