The 2026-27 Super El Niño: Crop Declines, Food Inflation Risks, and What It Means for Global Supply

United States – Corn Down ~6%

S&P Global's FACTBOX from August 4, 2026 explicitly states that US corn output is seen falling in 2026-27 . Corn shipment loadings are forecast at 60.7 million metric tons, down 14% year-on-year .

Brazil – Soybeans Down ~2.7%

S&P Global reports that Brazil soybean output is seen falling in 2026-27 . Rabobank projects that Brazil's soybean production growth will "slow down considerably" from its historical 3-4% annual growth rate . Rabobank forecasts a 2026/27 harvest of 178 million tons, down from 182 million tons in 2025/26 .

Brazil – Corn Also at Risk

Bank of America says Brazil's corn crop is "highly exposed" and expected to decline roughly 10% year-on-year .

Commodity Price and Inflation Risks

The financial impact of these crop declines is already being priced into markets. Goldman Sachs projects a 15.8% surge in global food commodity prices from the strength of this El Niño . They warn this could drive food inflation in the G7 to double digits by 2027 . The consequences, Goldman says, could take until the second half of 2028 to be "fully realised" .

• S&P Global warns that "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" .
• Allianz Research estimates that a super El Niño would transmit inflationary pressure in Asia primarily through food prices, with Indonesia most affected (+2.3 percentage points) and Malaysia also at risk .
• Societe Generale reports that agricultural commodity prices rose 7% in July alone, with softs (cocoa, coffee, wheat) up 8% over one week .
• Schroders notes that if past correlations hold, a very strong El Niño would imply a doubling of global food prices from current levels over the next year .

Extreme Weather Warnings from the WMO and S&P Global

The World Meteorological Organization (WMO) confirmed that El Niño developed in early July and expects it to "dominate global climate patterns in the August-October 2026 season," driving above-normal temperatures and major shifts in rainfall .

The WMO warns of lower rainfall and higher temperatures across Australia, Indonesia, India, parts of South Asia, and northern South America, while parts of North America and southern South America may see excessive rainfall and flooding .

S&P Global notes that the event will intensify both drought and heavy rainfall in different regions, with Australia, Brazil, India, and Southeast Asia facing the largest downside risks .

China Heat Wave – A Compounding Shock

Adding to the global supply pressure, a severe heat wave is sweeping China's northern and eastern agricultural breadbaskets, putting corn, rice, and cotton fields at heightened risk of crop damage during critical growth stages (corn at grain fill, cotton at boll set) . Temperatures of 35°C to 40°C are persisting across key producing regions .

China's state meteorological authorities have warned of increased extreme weather risks from the strong El Niño event . Shandong province, which accounts for about 10% of China's corn production, warned that high temperatures and humidity increase the risk of reduced yields . This compounds domestic supply pressure and could force higher import demand, tightening global grain markets further.

Caveats and Moderating Factors

The situation is not without important caveats. The severity of the final impact will depend on several moderating factors:

• Global grain inventories of rice, soybeans, corn, and wheat are approaching all-time highs, which may soften the immediate supply shock . Reuters reports that these near-record inventories provide a buffer not present in previous major El Niño events.
• The FAO projects 2026 global cereal production as the second-highest in history, though 1.9% below last year's record .
• Regions such as the Black Sea, Europe, and parts of China may experience less intense El Niño effects .
• Argentina is expected to be a net beneficiary, with corn shipment forecasts revised up 25% year-on-year .
• However, as Reuters notes, potential export restrictions from key producers could still pressure importers even without an outright global shortage .
• The supply impact also arrives slowly: Interactive Brokers notes that El Niño's production damage typically peaks 6–12 months after the event itself, meaning the worst may not show up in data until well into 2027 .