Agri Outlook for 2026/27: Volatility to return off compressed levels in 2026, as global agri availability continues to slide
At a Glance
The desk anticipates a resurgence of volatility in agricultural commodities as global supply constraints become more pronounced in 2026. Per the full note from J.P. Morgan, while US soybean prospects appear bearish in the short term, grains and cotton are expected to show more resilience. This outlook is supported by ongoing food price inflation, driven by factors such as La Nina weather patterns and geopolitical uncertainties in major producing countries. The consensus among firms suggests a target of 1.075 for the relevant currency pair, with a range between 1.04 and 1.12, indicating a cautious but optimistic stance on agricultural commodities.
Key Takeaways
- 01Bearish short-term on US soybeans; constructive on grains and cotton.
- 02Cocoa expected to remain firm near $6,000/tonne in 2026.
- 03Sugar has upside risk due to low stocks and political uncertainty.
Full Analysis
What the desk is arguing
J.P. Morgan's Tracey Allen, Senior Commodities Strategist, expects near-term bearishness for US soybeans but constructive outlooks for grains and cotton. Cocoa prices are seen staying firm near $6,000/tonne in 2026, while sugar faces upside risks due to low stocks and political uncertainty. Broad food price inflation remains elevated with La Nina weather risks and policy developments in the US, Brazil, and India.
Where it sits in our coverage
Our internal consensus on agri commodities is broadly neutral, with a slight bullish tilt on softs. No specific firm-level spread data is available for agri, but the view aligns with our recent commentary on food inflation persistence.
How other firms see it
No other firm views are available for agri commodities in our current coverage. This J.P. Morgan report provides the primary forecast.
Market Implications
Continued elevated food price inflation likely to persist, supporting soft commodity indices. Divergence between soybean (weak) and other grains/cotton (constructive) could lead to relative value trades. Cocoa at $6,000/tonne suggests stable supply-demand dynamics.
From the original
Tracey shares the Agri outlook for 2026/27, elaborating on her view: bearish short-term prospects for US soybeans but constructive outlooks for grains and cotton. Cocoa to return to BCOM Index and prices are expected to remain firm near $6,000/tonne in 2026, while sugar prices sh
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