Citigroup Boosts Corn, Soybean, Wheat Price Targets on El Niño Risks
Citigroup has raised its price targets for corn, soybeans, and wheat due to growing concerns about the potential impact of a 'Super El Niño' event on global agricultural production. According to the US National Oceanic and Atmospheric Administration, there is a 90% probability that a very strong El Niño will occur by late 2026 and early 2027.
The bank's new framework, called 'production at risk,' suggests that current market prices do not fully reflect the potential downside risks to global agricultural production. Citigroup has raised its three-month price targets for corn to $5.40 per bushel, soybeans to $12.75 per bushel, and wheat to $7.25 per bushel.
The bank also notes that multiple bullish factors are supporting grain prices, including weather- and El Niño-driven reductions in crop estimates, strong export demand, Black Sea disruptions, higher fertilizer and energy prices, and increasing global demand for biofuels.