El Niño 2026: Weather, Grain Stocks, and Fertilizer Risks Converge

El Niño is officially here, and it looks likely to be a strong one. On June 11, 2026, NOAA's Climate Prediction Center issued an El Niño Advisory, confirming that El Niño conditions are present and expected to strengthen into the Northern Hemisphere winter of 2026-27 . The agency's latest forecast gives a 63% chance of a very strong El Niño between November 2026 and January 2027 — an event that "would rank among the largest in the historical record going back to 1950" .

This is not just a weather story. It is a food-price story. The 2026 El Niño is developing at a time when global grain stockpiles — while still large — are starting to shrink, and when a separate supply shock from the Iran conflict is driving up fertilizer costs and tightening farm margins. The combination creates a risk profile that analysts from Citi Research, JPMorgan, and the EU Joint Research Centre all describe as "skewed to the upside" for food prices .

What the Forecasts Actually Say

The official ENSO outlook has shifted decisively. NOAA's June 2026 assessment reports equatorial sea-surface temperatures well above average across the central and eastern Pacific, with atmospheric circulation anomalies consistent with an ongoing El Niño . The El Niño is expected to persist through the Northern Hemisphere winter, with a 96% chance of continuation into December 2026–February 2027 .

The strength outlook remains broad — NOAA assigns only a 37% probability to the very strong category as of mid-June, meaning weak through strong outcomes are still possible . But other forecast models are more emphatic: the IRI/CCSR ENSO plume assigns a 98% probability to El Niño conditions in May–July 2026, and the CPC noted that a "very strong" event is now the most likely single category .

The EU's Joint Research Centre (JRC) has also warned that agricultural production is threatened by the combination of El Niño and high input prices, with below-average harvest prospects already observed in parts of East Africa .

Which Crops and Regions Are Most at Risk

El Niño's agricultural effects are asymmetric. The JRC notes that the event drives "opposing weather patterns" across different regions: severe dryness threatens maize and rice across Central America, the Caribbean, and Colombia, while above-average rainfall is forecast for Bolivia, Ecuador, and Peru .

Based on historical patterns and current USDA projections, the most exposed commodities are:

Rice is the most closely watched crop. Weaker monsoon rainfall across India and Southeast Asia can quickly reduce production in a staple that remains critical for food security across emerging markets . USDA expects global rice ending stocks to decline by about 2% in 2026/27, leaving a thinner buffer if weather losses emerge .

Corn faces a sharper stock drawdown. USDA projects global corn ending stocks will decline by about 7% in 2026/27, making corn one of the more exposed major grains if growing conditions deteriorate . Global coarse grain supply is projected at 2,156 million metric tons, down 15 million MT from 2025/26, while use is expected to rise .

Wheat is somewhat less exposed, with USDA projecting a 2% decline in global ending stocks, but the trajectory is still downward .

South American corn and soybeans face a timing risk. Current harvests are described as largely favorable, but upcoming El Niño conditions could create opposing weather patterns for the next planting cycle .

Palm oil production in Southeast Asia is vulnerable to drought conditions, which could reduce yields in Indonesia and Malaysia .

Cocoa has a strong historical link to El Niño. Every strong El Niño in the past 55 years has reduced cocoa output, according to investment firm WisdomTree .

Coffee — particularly robusta — is also historically sensitive, as El Niño typically brings drier conditions to key growing regions .

East African crops are already showing stress. Tanzania's bimodal areas have below-average harvest prospects after seasonal rainfall deficits, and further output deficits are likely in late 2026 due to the upcoming El Niño .

The Grain Stockpile Buffer: Large but Shrinking

The main reason the 2026 El Niño may not cause an immediate food-price crisis is that global grain inventories entered the season at near-record levels. FAO forecasts world cereal stocks at the close of 2026 at 954.6 million tonnes, pointing to a 9.6% increase above opening levels and record inventories for wheat and rice . The global grain stock-to-use ratio is forecast at 31.8%, the highest since 2001 .

However, that buffer is projected to shrink over the 2026/27 season. USDA reports that large carry-in stocks help supplement supplies at the start of the year, but strong demand is expected to draw down global stocks for wheat (-2%), rice (-2%), and corn (-7%) . Coarse grain ending stocks are forecast at 309 million MT, down 20 million MT from the prior year .

This means the cushion is meaningful but not unlimited. If El Niño-related crop losses emerge, the market will absorb them from a stockpile that is already in decline.

The Fertilizer Wildcard

The Iran conflict has created a separate, compounding supply pressure. Since the start of military action in late February 2026, the near-total closure of the Strait of Hormuz has disrupted fertilizer shipments that represent 25% to 35% of globally traded ammonia and urea .

Urea prices surged by roughly 40% to over $700 per metric ton in the weeks following the attack, up from around $487 prior to the conflict . The head of Yara, one of the world's largest fertilizer companies, warned that global food supplies could face severe disruption if the conflict drags on .

The EU JRC frames the key risk as a combination effect: El Niño and high input prices operating simultaneously . Elevated input costs reduce farmers' ability to respond to weather shocks with fertilizer, irrigation, or other yield-protecting measures. When both factors align, the same weather shock can produce a larger market impact.

Citi Research's Commodities Outlook report states that "agriculture price risks are heavily skewed to the upside over the next 6-12 months," citing the dual threats of a prolonged Strait of Hormuz closure and El Niño-related poor weather . JPMorgan's analysis similarly warns that fertilizer supply is tighter just as El Niño threatens to add climate stress, increasing the risk of lower output and additional food inflation .

The Combined Food-Price Picture

The balance of risks is clearly tilted toward higher prices, but the timing and magnitude are uncertain. The table below summarizes the competing forces:

Factor	Effect on Food Prices	Source
El Niño crop stress	Upward pressure on exposed regions and crops
Large carry-in grain stocks	Downward buffer that softens shocks
Projected stock drawdowns	Reduces the buffer over time
Lower projected coarse grain supply	Tightens feed-grain availability
High input prices / fertilizer shock	Raises production-cost pressure

Forecasters from the World Economic Forum to the EU JRC have warned that the combination could produce a broader food-price shock across 2026/27 . The Interactive Brokers research desk notes that the worst of the supply impact has not yet shown up in data: fertilizer shortages take a full growing season to appear in yields, and El Niño's production damage typically peaks 6–12 months after the event itself .

Bottom line: Near-record global grain inventories provide a meaningful near-term buffer, but that buffer is projected to shrink as wheat, rice, and corn stocks decline. If El Niño becomes moderate-to-strong while input costs remain elevated, the combination could produce a broader food-price shock across 2026/27 — especially in crops and regions already exposed to rainfall deficits or shifting weather patterns.