FACTBOX: El Niño may disrupt global food supplies as farm output falls

The ongoing El Niño weather phenomenon may disrupt food supplies in 2026-27, with global farm output seen falling.

The El Niño developed in early July, the World Meteorological Organization said. The National Oceanic and Atmospheric Administration has forecast that the ongoing El Niño may intensify during October-December and is likely to persist until April 2027.

"A strong late-2026 to early-2027 event would increase weather-driven volatility, with the largest downside risks concentrated in Brazil, Australia, India, and Southeast Asia, while Argentina is the clearest potential beneficiary from improved rainfall," S&P Global Energy CERA said in a report.

According to the WMO, an El Niño may lead to lower rainfall and higher temperatures across Australia, Indonesia, India, parts of South Asia, and northern South America. Conversely, parts of North America and southern South America may see higher rainfall during the event.

These regions are key producers and exporters of corn, soybeans, and wheat.

"El Niño conditions are already underway and are forecast to strengthen rapidly into a strong event. This will intensify the chances of drought and heavy rainfall," said WMO Secretary-General Celeste Saulo.

Infrastructure

• The Australian Bureau of Agricultural and Resource Economics and Sciences estimated Australia's wheat production for the marketing year 2026-27 (October-September), at 26.7 million metric tons, down 26% year over year.
• The US Department of Agriculture estimated corn output in MY 2026-27 (September-August) at 406.3 million mt, down 6% from a year ago.
• The USDA estimated soybean output in MY 2026-27 (September-August) at 120.7 million mt, up 4.1% year over year.
• CERA estimated Brazil's soybean production in MY 2026-27 (October-September) at 177 million mt, 2.7% lower year over year.
• "For the upcoming season's yields, we continue to see significant risk from lower fertilizer usage and El Niño conditions. NOAA has indicated nearly a 90% chance of at least a strong El Niño occurring during Brazil's soybean planting season in September-November," CERA said in another report.
• The USDA estimated Argentina's soybean output in MY 2026-27 (April-March) at 50 million mt, unchanged on year.
• Palm oil output in Indonesia for MY 2026-27 (October-September) is seen at 47.5 million mt, up 1.7% year over year, according to the USDA's Foreign Agriculture Service.
• "Although the 2026 El Niño has begun and conditions are turning drier, hotspot activity remains relatively subdued, making it too early to assess its full impact," Kuala Lumpur-based commodity analyst firm Glenauk Economics said in a July report.
• USDA's Foreign Agriculture Service has pegged Malaysia's palm oil production in MY 2026-27 (October-September) at 19.6 million mt, down 3% lower year over year.

Trade

• Australia's wheat exports are expected to decline 30.8% year over year to 19.3 million mt in MY 2026-27, according to the ABARES forecast.
• The USDA has forecast US corn exports at 331.6 million mt, down 1.5% year over year.
• The USDA pegged US soybean exports in MY 2026-27 at 45.18 million mt, up 9.2% year over year.
• CERA pegged Brazil's soybean exports at 112 million mt in MY 2026-27, down 1% year over year.
• Argentina's soybean exports are seen 31.1% lower on year at 6.2 million mt in MY 2026-27, USDA said.
• Indonesia is expected to ship out 25 million mt of palm oil in MY 2026-27, up 4% on year, according to FAS estimates.
• In MY 2026-27, Malaysia is likely to sell 15.9 million mt palm oil, up 1% on year, FAS said.

Prices

• Platts, part of S&P Global Energy, assessed Australian premium white wheat FOB at $289/mt on July 31, up from $261/mt on Aug. 1, 2025. Platts assessed Australian standard white wheat at $282/mt on July 31, up from $253/mt on Aug. 1, 2025.
• Platts assessed US corn CIF New Orleans at $215.65/mt on July 31, compared against $187/mt on Aug. 1, 2025. Platts assessed Brazil corn FOB Santos at $221.54/mt on July 31, compared with $208.45/mt on Aug. 1, 2025.
• Platts assessed SOYBEX FOB Santos at $484.58/mt on July 31, compared against $435.16/mt on Aug. 1, 2025. Platts assessed SOYBEX FOB New Orleans at $481.53/mt on July 31, compared against $391.41/mt on Aug. 1, 2025.
• Platts assessed crude palm oil FOB Indonesia at $1,205/mt on July 31, compared against $1,077.5/mt on Aug. 1, 2025.