Large grain stocks and new technologies reduce risks from ‘super’ El Niño

The global food system is better prepared to withstand a powerful El Niño than during previous severe weather events. Near-record grain inventories, higher crop yields, advances in agricultural technology and the emergence of new major exporters could cushion the impact of drought on global food production and prices.

Dry weather is already disrupting agriculture across India, Southeast Asia and Australia. India is experiencing a deficient monsoon season, risks to Australia’s wheat crop are increasing, while crops in Indonesia and Thailand are suffering from a lack of moisture. El Niño is expected to strengthen further in the fourth quarter of 2026 and early 2027 and could become one of the strongest on record.

At the same time, large global inventories of key agricultural commodities provide a significant buffer. India has accumulated rice stocks exceeding the equivalent of more than one year of total global rice exports, while China holds nearly half of the world’s wheat stocks. Global palm oil inventories are also near historic highs.

The emergence of new major export hubs has further strengthened the resilience of global agricultural markets. Brazil has become the world’s largest soybean supplier, with its exports increasing more than 13-fold compared with 1997/98. The geography of supplies of other major agricultural commodities has also expanded significantly, allowing importers to diversify their sources.

Farmers are also much better equipped technologically to cope with adverse weather. Drought-tolerant corn hybrids, heat- and drought-tolerant wheat varieties, short-duration rice varieties, precision agriculture, satellite crop monitoring and improved forecasting systems are helping reduce potential crop losses. AI-powered platforms are also increasingly being used to provide recommendations on planting dates, irrigation and fertilizer application.

Despite these improvements, risks to the global food market remain high. The powerful El Niño coincides with geopolitical tensions, disruptions to fuel and fertilizer supplies and high agricultural input costs. As a result, the ultimate impact of the weather phenomenon will largely depend on how climate and geopolitical conditions develop during the second half of 2026.

Tags: grain, soybean, stocks, crop forecast