Citi Raises Price Targets for Corn, Soybean, Wheat Amid Super El Niño Risks
Citi has raised its price targets for corn, soybean, and wheat due to the growing risks of a Super El Niño. The bank's new Production-at-Risk framework indicates that current market pricing only reflects a portion of the potential downside risks to global agricultural production.
The largest weather-exposed commodities are corn, soybean, rice, palm oil, Australian wheat, and other grains, with risks concentrated in Australia, India, Southeast Asia, and parts of Brazil. A strong El Niño poses significant threats to palm oil production in Indonesia and Malaysia, which could create a pull for corn and soybean prices through larger crush demand.
Citi also notes that wheat remains the grain most exposed to weather and geopolitical risks. Recent hot and dry conditions across Europe have already reduced wheat production estimates.