Super El Niño: Regional Differences And Read-throughs For 2H26-2027

Research evidence excerpt

Super El Niño: Regional Differences And Read-throughs For 2H26-2027

quent climate stress for Please join us for a deep dive on the weather

crops and a rise in farmer interest in crop resilience to abiotic stress could support 0.5-1.0x higher outlook for this summer and fall on July 8 at

EV/EBITDA for Buy-rated CTVA (2x that for the seed business), whereas fertilizer demand (esp. 11 AM ET: REGISTER

potash) could be at risk near-term. Higher vegetable oil prices would be an incremental headwind

for Buy-rated KWR. Water stress could become a regional catalyst for investment in precision ag

and increase interest in Buy-rated ECL.

Energy Asymmetric: A milder Atlantic hurricane season reduces disruption risk premiums in

oil and LNG markets tied to the Gulf of Mexico and Atlantic basin. At the same time, elevated

temperatures and weak rainfall across Asia increase electricity demand and reduce hydropower

output, supporting regional LNG, coal, and power prices. A warmer Northern Hemisphere winter

remains likely, which could reduce heating demand for gas and oil in early 2027, partially offsetting

these pressures. A wider regional spread could benefit Buy-rated CE and MEOH. A less severe

hurricane season also implies more risk of a petrochemical de-stock in Q4, an incremental risk for

Hold-rated DOW and LYB.

Industrial Risk Stochastic: Exposure is concentrated in hydropower-dependent production

systems, such as aluminum, and in weather-sensitive logistics chains affecting metals like copper.

These risks remain scenario-based rather than fully realized in current data.

Laurence Alexander * | Equity Analyst

Financial Volatility: In derivatives markets, elevated volatility and weather-related risk premia are +1 (212) 284-2553 | lalexander@jefferies.com