Rice has had the most dramatic four-week run of any ingredient market. CBOT rough rice futures, which had opened 2026 near nine-year lows of $9.80 per hundredweight on abundant global supply, staged a sharp reversal through May and into June. By late May, futures briefly touched $13 per hundredweight — the highest level since August 2025 — before easing to around $12.50 in the first week of June.
The trigger was not a single event but a convergence. The USDA's latest 2026/27 outlook turned unambiguously bearish on supply: global milled rice output is projected at 537.9 million tonnes, down 0.9% from 2025/26, against record consumption of 541.3 million tonnes. That demand-supply inversion — consumption exceeding production — will draw down global stocks by 1.8% to 192.7 million tonnes. It is the tightening stocks number that matters most to forward price pressure.
"Rice prices also moved higher, lifted by weather worries and rising energy costs in key Asian exporting countries."
— Price Group Grains Report, June 5, 2026Layered on top of the USDA numbers: fertilizer costs linked to the Hormuz situation are lifting production costs across Southeast Asia, India's monsoon has started late, and El Niño is now confirmed. The market is not panicking — $12.50 is still well below the $19 peak of May 2024 — but the direction of travel has reversed decisively from the January lows. The FAO's June 2026 forecast projects a potential further 12–15% correction upward by Q4 2026 if monsoon patterns disappoint across South and Southeast Asia.
The $9.80–$13 range represents a 32% swing in four months. Buyers who locked in forward contracts at January prices have a meaningful landed-cost advantage over those buying spot today. The USDA's supply-consumption deficit for 2026/27 is the first such deficit in several years and has not yet fully priced in El Niño crop losses, which will only become visible in the market from August onwards when monsoon performance data arrives.
Tapioca is the most striking market story of the past month. The Thai Tapioca Starch Association's official FOB Bangkok price on June 2 was $665 per tonne — up from $525 on March 31 and $565 on April 28. That is a 27% rise in ten weeks, carrying straight through into the early June reporting period. Vietnam's offer prices have tracked Thailand's move closely throughout.
The driver is not El Niño itself — not yet. It is a raw cassava shortage that predates the Pacific warming and has been building since late 2025. Thailand tightened border controls on cassava imports from Laos and Cambodia in January 2026, removing a significant supplemental raw material source. China's demand for cassava in food, fermentation, and animal feed remained high through the Lunar New Year and has not retreated. The result is a market already in a "raw material shortage — peak price maintenance" cycle that El Niño now threatens to make significantly worse.
The structural logic is straightforward: cassava is a rain-dependent crop grown predominantly in Thailand, Vietnam, and Cambodia — all directly in the El Niño drought zone. A normal cassava growing season needs adequate rainfall through the main planting and root development period. With El Niño now confirmed and drought conditions expected across Southeast Asia through Q3 and Q4 2026, the next cassava harvest — which would typically begin restocking the market in late 2026 — may arrive smaller and more expensive than the market is currently pricing.
At $665/MT, tapioca is 51% above its December 2025 starting price and approaching levels not seen in several years. Sellers currently have strong pricing power; buyers report reduced availability of prompt cargoes and compressed scheduling flexibility. Any buyer using tapioca maltodextrin or modified starch as an alternative to rice-based ingredients — hoping to hedge El Niño rice risk — needs to factor in that tapioca is already expensive and faces its own supply constraints from the same climate event.
Corn has moved in the opposite direction from rice and tapioca — and for reasons that are, broadly, good news for buyers of corn-derived ingredients. CBOT July futures dropped to around $4.20 per bushel in early June, hitting a four-month low. The national average cash corn price came in at $3.90 — its lowest reading since early 2026. Barchart's commentary described the move as "death spiral liquidation."
The catalyst is the crop itself. US corn planting reached approximately 93% complete by late May — ahead of the five-year average — and the USDA rated 67% of the crop in good-to-excellent condition. Favorable weather conditions across the Midwest strengthened expectations for a large 2026 harvest. El Niño's cooler, wetter signature in the I-states is delivering broadly as the historical analogs predicted, and the market is pricing in a strong crop accordingly.
A potential US-Iran ceasefire deal — which, if it materialises, would reopen the Strait of Hormuz and restore flows of fuel and fertilizer — has added additional downward pressure on corn by suggesting global grain supply could ease further in 2027. The underlying USDA balance sheet for 2026/27, while tighter than last year on export commitments, is not signalling the kind of scarcity that would support sustained price rallies.
The constructive corn picture carries one persistent caveat that the futures market has not fully resolved. With urea prices up 46% in a single month due to Hormuz disruption, many US corn growers are applying less fertilizer than optimal to protect margins. Kpler's analysts estimate this could pull the national corn yield below the trendline even in otherwise favorable weather. The market knows this — it is part of why corn hasn't collapsed further despite a good planting season. A yield shortfall in August crop surveys could reverse the recent price decline quickly.
$4.20/bu corn is constructive for glucose syrup, maltodextrin, and corn starch buyers on a cost-of-goods basis. The direction is favorable. But the fertilizer-yield risk and the possibility of a sharp August reversal if crop ratings soften mean this is not a market to ignore entirely. Buyers benefiting from current prices should consider whether to lock in some forward coverage while the crop outlook is favorable, rather than assuming the current level holds through harvest.
Taken together, these three markets are telling a coherent story — and it is one with a sharp geographic divide. Asian-origin ingredients are repricing upward, driven by supply tightness that began before El Niño arrived and will intensify as it does. Americas-origin ingredients are softening, reflecting a broadly favorable 2026 growing season that the same El Niño is helping create.
This divergence is important because it means the standard hedge — "if rice gets expensive, switch to tapioca or corn maltodextrin" — is only partly working right now. Tapioca is already expensive for independent reasons and faces the same El Niño drought exposure as rice. Corn maltodextrin, from US origins, is genuinely cheaper than six months ago. But it requires formulation qualification, approved supplier status, and lead times that cannot be compressed overnight. The buyers who did that qualification work in 2024 and early 2025 have optionality now. Those who didn't are facing a constrained market across Asian origins with limited short-term alternatives.
The FAO's food price index for May came in 2.9% higher year-on-year. Cereal prices rose 2.6% in May alone. These are not crisis numbers — but they are moving in the direction that El Niño's arrival, combined with fertilizer disruption and below-trend monsoon performance, would be expected to accelerate through Q3 and Q4 2026.