BofA raises ag commodity targets on supply risks

Investing.com -- Bank of America raised its price targets for several agricultural commodities as the bank expects tighter supply conditions in the 2026-27 marketing year to support prices.

The bank increased its soybean price forecast by $1.50 per bushel to $13.50 per bushel for the 2026-27 season. The bank said the revision reflects a tighter US soy balance sheet due to lower production prospects, stronger crush demand, and solid export potential. Prices could reach $14.00-14.50 per bushel if the Xi-Trump meeting generates additional export demand, the bank added.

Bank of America also lifted its sugar price target to 20 cents per pound from 17 cents per pound. The bank cited production losses in Europe, a weaker Asian monsoon, and excessive rain risks in Centre-South Brazil as factors that reinforce a tighter global sugar balance.

For wheat, the bank now sees prices moving towards $8-10 per bushel compared to $7.70 per bushel previously. The bank noted that halfway through the Black Sea export season, there is no ceasefire or export deal in sight, making lost volumes harder to recover. If conflicts de-escalate, wheat prices could fall back to $6 per bushel, the bank said.

Bank of America maintained its new crop corn price target at $5.50-6.00 per bushel. The bank said unfavorable pollination weather has put US corn yields at risk, pushing the 2026-27 stock-to-use ratio towards levels historically associated with major bull markets below 10%. The bank expects the ratio to fall to 8-9% compared to the USDA projection of 9.7%.

The bank identified US-China trade talks and geopolitical risks as key swing factors for agricultural markets. A lack of additional Chinese purchases of US agricultural products would be a bearish event risk, while conflicts de-escalation could trigger a broader risk-off move across commodities, the bank said.

You May Also Be Interested In

• US and Iran discuss phased deal to reopen Hormuz and end US blockade - Reuters
• Increasing unusual put option volume: MTCH ARR XEL Q EWZ BILI ZVRA P SPYM OWL LABD VKTX QURE
• Acadia Pharmaceuticals (ACAD) PT Lowered to $34 at BMO Capital Amid Heavy Selling