El Niño and Agricultural ETCs: Cocoa, Coffee and Wheat

El Niño Brings Agricultural Commodities Back Into Focus

The return of El Niño is bringing agricultural commodities back into the spotlight for investors.

According to the latest update from the NOAA Climate Prediction Center, El Niño is strengthening and has a probability of more than 90% of becoming very strong during the Northern Hemisphere autumn and winter of 2026-27. For the October-December 2026 period, NOAA also indicates a 75% probability that the event will reach a historically exceptional strength according to the RONI metric.

This scenario does not automatically mean that all agricultural commodities will rise. The effects of El Niño vary depending on the region, crop, and initial supply and demand conditions.

For investors, however, the theme is particularly important because cocoa, coffee, sugar, wheat, corn and soybeans can be affected by changes in weather conditions, agricultural yields and inventories.

One of the simplest ways to gain exposure to agricultural commodities through European markets is through ETCs, or Exchange Traded Commodities.

What Are Agricultural Commodity ETCs?

ETCs are exchange-listed instruments that provide exposure to the performance of a commodity or a basket of commodities.

In the case of agricultural commodities, investors can therefore gain access to markets such as:

• cocoa;

• coffee;

• sugar;

• wheat;

• corn;

• soybeans;

• vegetable oils;

• agricultural baskets;

• grains and soft commodities.

However, it is important to understand one fundamental distinction: an ETC on commodities does not necessarily represent the purchase of the physical commodity.

Performance may depend on the structure of the underlying futures, contract rollovers, contango or backwardation and, for a European investor, movements in the euro/dollar exchange rate.

Agricultural ETCs in Euro Available on Borsa Italiana

The WisdomTree range listed in Italy includes both ETCs with unhedged currency exposure and several EUR Daily Hedged versions.

WisdomTree's official documentation indicates TER/MER of 0.49% for these instruments. The Italian trading currency is EUR, while the base currency for many products remains USD.

Structural data: official WisdomTree documentation; products listed in Italy; data updated to July 2026.

Note: The table includes agricultural instruments in EUR identified in the Italian WisdomTree list. Products tracking the same commodity may have additional listings on Xetra or the London Stock Exchange and are not necessarily shown as separate instruments in the table.

Which Agricultural ETCs Should Be Monitored With El Niño?

The first point to clarify is that El Niño does not automatically trigger a rise in agricultural commodities.

The phenomenon changes the probability of certain regional weather conditions. The actual impact then depends on the crop, production area, inventories and market conditions.

The latest NOAA outlook, for example, points to a very strong El Niño during the second half of 2026 and winter 2026-27, but also emphasizes that a stronger event does not necessarily produce the same impacts in every region.

For this reason, it is more accurate to talk about commodities that are more sensitive to climate risk, rather than ETCs that are necessarily expected to rise.

1. Cocoa: COCO

Cocoa is one of the agricultural commodities most sensitive to supply-side shocks.

Production is highly geographically concentrated, and adverse weather conditions can have significant consequences for harvests.

For investors monitoring this theme:

WisdomTree Cocoa – COCO

ISIN: JE00B2QXZK10

TER/MER: 0.49%

Cocoa may therefore become particularly important to monitor when adverse weather conditions emerge in major producing regions.

2. Coffee: COFF and ECOF

Coffee is another market particularly sensitive to weather conditions.

Brazil and Vietnam are key producing regions, and significant changes in weather conditions can alter harvest expectations.

European investors have access to:

COFF – WisdomTree Coffee

and

ECOF – WisdomTree Coffee EUR Daily Hedged

The key difference is currency exposure.

COFF has a USD base currency, while ECOF uses a daily hedging structure against the euro. Both have a TER/MER of 0.49% according to WisdomTree documentation.

3. Sugar: SUGA and ESUG

Sugar is influenced by harvests, weather conditions, global demand and, in particular, the relationship between sugar and ethanol production in Brazil.

Available instruments include:

• SUGA – WisdomTree Sugar;

• ESUG – WisdomTree Sugar EUR Daily Hedged.

Here too, the hedged version allows investors to reduce direct exposure to the USD/EUR exchange rate.

4. Wheat: WEAT and EWAT

Wheat has a different market dynamic compared with cocoa and coffee.

In addition to weather conditions, key factors include:

• global production;

• inventories;

• exports;

• Russia and the Black Sea region;

• Ukraine;

• international demand;

• U.S. crop conditions.

The ETCs available in EUR are:

• WEAT – WisdomTree Wheat;

• EWAT – WisdomTree Wheat EUR Daily Hedged.

Both have a TER/MER of 0.49%.

5. Corn: CORN and ECRN

Corn has an important characteristic: it is not used exclusively for food.

It is also essential for:

• animal feed;

• ethanol production;

• the food industry.

Available instruments include:

• CORN – WisdomTree Corn;

• ECRN – WisdomTree Corn EUR Daily Hedged.

Again, the hedged product allows investors to reduce the impact of currency movements.

6. Soybeans: SOYB, ESOY and SOYO

Soybeans are particularly important for the animal feed and vegetable oil markets.

Available instruments include:

• SOYB – WisdomTree Soybeans;

• ESOY – WisdomTree Soybeans EUR Daily Hedged;

• SOYO – WisdomTree Soybean Oil.

This distinction is important because soybeans and soybean oil do not represent the same exposure.

Agriculture Basket: AIGA

For investors who do not want to concentrate on a single commodity, there is another particularly interesting alternative: WisdomTree Agriculture – AIGA.

The idea is to gain exposure to a basket of agricultural commodities rather than depending on the performance of a single market.

This is an important distinction.

Investing exclusively in cocoa means taking a highly specific exposure.

Investing through an agricultural basket instead distributes exposure across several markets.

In May 2026, WisdomTree reported that AIGA had reached approximately USD 1.4 billion in AUM, following approximately USD 1.2 billion of inflows since the beginning of the year. The figure is therefore subject to change and should be updated before the final publication of the article.

Agriculture, Grains and Softs: What Is the Difference?

To better understand the available range of instruments, it is useful to distinguish three baskets.

AIGA – Agriculture

This is the broadest agricultural basket.

It can be used when the objective is to gain diversified exposure to the agricultural commodities sector.

AIGG – Grains

This ETC focuses on grains.

It may therefore be more directly linked to themes such as:

• harvests;

• inventories;

• food security;

• animal feed demand;

• wheat geopolitics.

AIGS – Softs

This ETC focuses on so-called soft commodities, such as agricultural commodities outside the grain sector.

WisdomTree's official documentation confirms a TER/MER of 0.49% and EUR listings on Borsa Italiana for all three instruments.

Which ETC Should You Choose? A Simple Guide

For an average investor, the choice can be reduced to three situations.

I Want to Invest in a Single Commodity

The main instruments are:

This approach provides greater exposure to the individual theme, but also greater specific risk.

I Want to Diversify

It is possible to use:

AIGA – Agriculture

or, depending on the objective:

AIGG – Grains

AIGS – Softs

Diversification reduces dependence on the performance of a single commodity, but does not eliminate the risk of loss.

I Want to Reduce Dollar Exposure

For some commodities, EUR Daily Hedged versions are available:

• ECOF → coffee;

• ECRN → corn;

• ESOY → soybeans;

• ESUG → sugar;

• EWAT → wheat.

Currency hedging does not eliminate all risks and does not necessarily mean that the product will generate a higher return.

The Hypothetical Portfolio Structure

In the previous analysis, we proposed a possible thematic structure aimed at protecting against food supply shocks and agricultural inflation:

The rationale is simple:

AIGA 40%
Forms the diversified core.

Cocoa 20% + Coffee 20%
Increase exposure to agricultural commodities characterized by high sensitivity to supply-side and climate factors.

Sugar 10% + Wheat 10%
Add exposure to markets driven by different factors.

This structure should be considered an educational example and not a personalized investment recommendation.

The Key Variable to Monitor: Futures

One of the most common mistakes when investing in commodities is to look exclusively at the spot price.

An ETC based on futures can perform differently from the spot price of the underlying commodity.

The reason is the contract rollover.

Contango

When futures with later maturities are more expensive than nearby contracts, the market is in contango.

Rolling contracts can therefore generate a cost.

Backwardation

When short-dated contracts are more expensive than contracts with later maturities, the market is in backwardation.

In this case, the rollover can contribute positively to performance.

Therefore:

commodity spot price ≠ necessarily ETC performance.

Four Indicators to Monitor

An investor who wants to use agricultural ETCs in an informed manner should monitor at least four elements.

1. Futures Curve

This helps determine whether the market is in contango or backwardation.

2. U.S. Dollar

Since many commodities are priced in U.S. dollars, EUR/USD movements can affect the result for a European investor.

3. COT Report

The Commitments of Traders report allows investors to analyze the positioning of market participants in the futures market.

It can be useful for identifying particularly concentrated positioning.

4. USDA and WASDE

The WASDE – World Agricultural Supply and Demand Estimates report published by the USDA is one of the main sources for analyzing agricultural production, consumption, exports and inventories.

El Niño: Why Monitor It Alongside ETCs?

The interesting aspect of the current scenario is that El Niño is not simply a weather variable.

For financial markets, it can become a macroeconomic supply-side factor.

The sequence to monitor is:

El Niño → changes in weather conditions → potential changes in crop yields → changes in inventories → agricultural futures → commodity prices → food prices → inflation.

However, each step introduces additional variables.

A particularly strong climate event therefore does not automatically guarantee a generalized rise in commodities.

NOAA itself highlights that even the strongest El Niño events do not necessarily produce the same impacts across all geographical areas.

El Niño and Food Inflation

The link with inflation is one of the most interesting aspects for investors.

If a climate event significantly reduces the production of a commodity, its price may increase.

If that increase is transmitted along the production chain, it may contribute to higher food prices.

However, transmission is neither immediate nor uniform.

Investors should also monitor:

• global inventories;

• production;

• demand;

• energy costs;

• transportation;

• exchange rates;

• agricultural policies;

• geopolitics;

• substitution between crops.

For this reason, agricultural ETCs can be used as thematic exposure instruments, but they should not be considered a perfect and automatic hedge against inflation.

Agricultural ETCs: What to Check Before Buying

Before purchasing an ETC, investors should check:

1. TER/MER
The instrument's stated annual cost.

2. AUM
Assets under management, which can be useful as an indicator of the product's size.

3. Liquidity
How easily the instrument can be traded.

4. Bid/Ask Spread
The difference between the buying and selling price.

5. Underlying Structure
Which futures are used and according to what methodology.

6. Contango/Backwardation
To understand the impact of contract rollover.

7. EUR/USD Exchange Rate
Particularly important for unhedged ETCs.

8. Issuer Risk and ETC Structure
ETCs should not be confused with traditional UCITS ETFs.

A Possible Approach for the Average Investor

For someone approaching agricultural commodities for the first time, the simplest approach may be to proceed in stages.

First Level: Diversification

Use a basket such as AIGA rather than immediately concentrating on a single commodity.

Second Level: Thematic Exposure

Potentially add a specific allocation to cocoa, coffee, sugar or wheat if there is a specific macroeconomic thesis.

Third Level: Monitoring

Follow:

• El Niño;

• weather forecasts;

• USDA/WASDE;

• inventories;

• COT;

• futures curve;

• EUR/USD.

This approach helps distinguish between investing in a commodity and investing in a macroeconomic thesis.

In Summary

The return of El Niño in 2026-27 makes agricultural commodities a segment worth monitoring particularly closely. NOAA currently indicates a strengthening event, with a probability of more than 90% of a very strong El Niño during autumn-winter 2026-27.

For European investors, there is a broad range of ETCs listed in euros providing access to cocoa, coffee, sugar, wheat, corn, soybeans and agricultural baskets.

COCO, COFF, SUGA, WEAT, CORN and SOYB allow investors to focus on individual commodities, while AIGA, AIGG and AIGS provide a more diversified approach. The EUR Daily Hedged versions available for some commodities allow investors to manage currency exposure differently.

For the average investor, however, choosing the ETC should only be the final step of the analysis.

The key factor to understand is the combination of climate, production, inventories, demand, futures, contango/backwardation, COT positioning, the U.S. dollar and inflation.

In other words, it is not enough to ask "Will El Niño push commodities higher?". A more useful question is: which commodity is exposed, in which geographical area, with what inventory levels, what futures curve and what market positioning?

It is precisely by combining these factors that a more comprehensive view of the agricultural commodities market can emerge.

Disclaimer: This article is provided for informational and educational purposes only and does not constitute financial advice, a solicitation to the public to invest, or a recommendation to buy or sell financial instruments. ETCs involve risks, including significant risks and the potential loss of invested capital. TER, AUM, prices, liquidity and instrument availability may change over time. Information relating to El Niño represents data and forecasts available as of the publication date and may subsequently be revised. Before making investment decisions, investors should consult the issuer's official documentation and assess their own financial situation and risk profile.