A “super” El Niño expected in 2026–27 could rattle food supplies, push key crop prices sharply higher, and keep inflation pressure in play for years. For investors, that kind of shock can hurt some stocks tied to food and commodities while creating openings in others that are better positioned for price spikes and volatility. This article looks at three stocks that are closely exposed to the El Niño news, with one that could benefit from the setup and two where the risks may be more concerning, helping you think through where to be cautious and where to stay curious.

Olam Group (SGX:VC2)

Overview: Olam Group is a Singapore based food and agri business that sources, processes, packages and supplies a wide range of crops and ingredients, from cocoa, coffee and dairy to grains, rice, edible oils and animal feed, serving customers across food, feed and fiber markets worldwide.

Operations: Olam Group generates about SGD29.0b from Olam Food Ingredients and SGD1.1b from the Remaining Olam Group segments, with revenue spread across Africa, Europe, the Americas and Asia, the Middle East and Australia.

Market Cap: SGD4.6b

Olam Group sits right in the firing line of a potential “super” El Niño, with heavy exposure to coffee, rice, palm oil and other crops where supply shocks and thin margins can quickly turn higher commodity prices into sourcing headaches and contract pressure rather than clean upside. At the same time, the stock screens as significantly undervalued against one fair value estimate and analysts are projecting rapid earnings growth, which may tempt investors to overlook financing risk, large one off items and the decision to skip a final FY2025 dividend. In addition, ongoing restructuring, major board changes and dependence on complex global trade flows mean that Olam currently appears more like a high risk puzzle than a straightforward opportunity.

Olam Group’s “undervalued” label and upbeat earnings projections may be masking financing strain, restructuring uncertainty and skipped dividends, so it pays to stress test the full risk reward picture with the 3 key rewards and 2 important warning signs (1 is major!)

Nestlé (SWX:NESN)

Overview: Nestlé is a global food and beverage company based in Switzerland that owns a wide portfolio of everyday brands across coffee, confectionery, dairy, prepared meals, nutrition, pet care and bottled water. It sells products into major markets from the United States and Europe to Asia, Latin America and Africa.

Operations: Nestlé generates CHF34.5b from Zone Americas, CHF20.6b from Zone Asia, Oceania and Africa, CHF17.6b from Zone Europe, CHF6.6b from Nestlé Health Science, CHF6.5b from Nespresso and CHF3.5b from Waters and Premium Beverages, with additional revenue from other businesses.

Market Cap: CHF213.9b

Nestlé appears to have the characteristics of a classic defensive stock on the surface, with a 3.73% dividend yield, a wide portfolio of everyday brands and an “undervalued” signal relative to one fair value estimate. However, the setup around a possible super El Niño may make the situation more fragile than it appears. The company is heavily exposed to coffee, sugar and palm oil at the same time as earnings have been under pressure, debt is high and funding relies entirely on external sources. Prolonged commodity spikes and sticky inflation could squeeze margins just as cash generation is already tight. When recent supply chain and product quality headlines are added to the mix, Nestlé can start to look more like a rich priced safety trade where investors need to be very sure the downside is fully understood.

Nestlé’s “defensive” label, high debt and tight cash generation could be pulling in investors who have not fully weighed the downside. Before treating it as a safe haven, review the 3 key rewards and 1 important warning sign

Archer-Daniels-Midland (ADM)

Overview: Archer-Daniels-Midland is a global agricultural processor and nutrition company that buys crops like soybeans, corn and wheat, turns them into oils, meals, sweeteners and specialty ingredients, and supplies food, feed, biofuel and industrial customers around the world.

Operations: Archer-Daniels-Midland generates about US$63.7b from Ag Services and Oilseeds, US$11.5b from Carbohydrate Solutions, US$7.6b from Nutrition and US$0.5b from Other, with US$2.6b removed in intersegment eliminations.

Market Cap: US$38.8b

Archer-Daniels-Midland sits close to the center of the potential “super” El Niño story, because its grain origination network, oilseed crushing and biofuels exposure can turn higher crop prices and volatility into trading and margin opportunities rather than purely cost pressure. Policy support for biofuels, a recovering Nutrition segment and cost savings plans are pointing to better quality earnings, even though recent net margins were only 1.3%, earnings declined over the last 5 years and a large US$336.0m one off loss highlights how volatile results can be. With the stock trading on a high P/E relative to the US Food industry and funding heavily reliant on external borrowing, investors who want exposure to a possible El Niño driven commodity squeeze have reasons to be interested in Archer-Daniels-Midland, but also to be very selective about the risks they are willing to accept.

Archer-Daniels-Midland sits where El Niño volatility, biofuels policy and a recovering Nutrition segment intersect. Yet the real story may be hiding in plain sight. Get the full risk and upside picture in the 1 key reward and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.