Guotai Asset Management flags El Niño risk as trigger for grain-sector re-rating

Guotai Asset Management flagged a potential re-rating window for China’s grain sector as El Niño risks intensify.

• Guozheng Grain Industry Index (399365) surged more than 5% intraday, with seed and grain-planting names leading gains.
• CPC raised the odds of a Very Strong El Niño in Oct-Dec 2026 to 95%; probability of RONI at or above +2.5°C hit 69%.
• USDA cut U.S. corn yield by about 1.3% and soybean yield by about 0.6%; crop ratings weakened to 60% for corn, 61% for soybeans.
• Global grain stock-to-use ratios are projected to fall in 2026/27, amplifying price sensitivity if weather-driven yield cuts extend to key regions.