The United States Department of Agriculture took its first stab at production and consumption estimates for the 2026/27 marketing year (July to June) in the May edition of the World Agricultural Supply and Demand Estimates, released on Tuesday of last week.
The global wheat outlook for the new crop season revealed a sizeable drop in supplies, marginally lower consumption, reduced trade, and decreased ending stocks compared with the 2025/26 marketing year. Worldwide wheat production is pegged at 819.1 million metric tonne, 2.9 per cent, or 24.7MMT lower than output in the current season. A significant proportion of the lower production is across the major wheat exporting countries, with the United States, the European Union, Argentina, and Australia accounting for the largest reductions.
The US harvest projection of 42.5MMT is 11.5MMT lower than last year’s harvest of 54.0MMT. One of the biggest surprises was the decline in harvested area from 15.1 million hectares to 13.3 million hectares, with the abandonment rate rising from 25 per cent last year to 32 per cent this year. Persistent environmental challenges on the Plains are the primary driver, with the ongoing drought leaving a clear mark on the US balance sheet. At just 14.0MMT, the hard red winter estimate is down 7.9MMT year-on-year, making it the smallest HRW crop since 1957.
The EU crop has been trimmed by 9.1MMT from 145.1MMT in 2025/26 to 136.0MMT in 2026/27, but still 1 per cent above the five-year average. The declines are primarily in the Balkans, central Europe and the Baltics, but after a dry spring, rains this month have brought relief in many regions, reducing the risk of widespread yield losses this season.
A decrease in planted area and a normalisation of yields are expected to push Argentina’s wheat production down from a record of 27.9MMT last harvest to 21.0MMT this year. This is in line with the Buenos Aires Grain Exchange forecast of 21.3MMT, but above the 18-19MMT range provided by the Rosario Grain Exchange.
While planting Australia’s winter crops is well advanced in many regions, dry conditions persist throughout southern Queensland, northern New South Wales and parts of Western Australia. After a run of poor seasons, the rains have returned to South Australia, boosting that state’s production outlook. The increased cost of fuel and uncertainty around fertiliser supplies later in the crop year are added challenges, which collectively are expected to lead to a decrease in the planted area and a fall in production from 36MMT last harvest to 30MMT at the end of 2026.
Wheat output in the Black Sea region is also forecast to fall, with the Russian crop decreased from 90.3MMT in 2025 to 86.0MMT, the Ukrainian harvest projection 1.1MMT lower at 23MMT, as well as 2.0MMT and 1.0MMT trimmed from output projections in Romania and Bulgaria, respectively. The Russian crop comprises 61.0MMT of winter wheat, down from 63.0MMT last year, and 25.0MMT of spring wheat, down from 27.3MMT in 2025.
The USDA has pencilled Canada in for 35MT of wheat in 2026/27, down from a record 40.0MMT this season. A 1.0 per cent decrease in the seeded area, coupled with a return to a more average yield projection, is behind the decrease. Seeding operations in most regions are gaining traction after a slow start to the season. Most of the country’s cropping districts received normal to well-above-normal precipitation in April, easing concerns in drought-affected areas across the south of Alberta and Saskatchewan.
On the demand side of the equation, the global wheat consumption forecast is almost unchanged at 823.2MMT in 2026/27, compared to 823.5MMT in 2025/26. Feed and residual demand is expected to drop in China, the EU, Russia, and Kazakhstan, partially offset by an increase in India. Food, seed, and industrial consumption is forecast to increase, much of it in India on the back of population growth and a very hungry public distribution system.
China remains the largest global consumer, although the USDA has the quantity 2.0MMT lower season-on-season at 148.0MMT. The EU is next at 113.8MMT, down from 115.5MMT in the current marketing year, followed by India at 111.1MMT, up from 107.7MMT in 2025/26, and Russia at 40.2MMT, down from 41.7MMT this season.
Global wheat trade in the 2026/27 marketing year is projected to decline by 12.0MMT to 211.7MMT, primarily in the wake of lower import demand from North Africa and the Middle East. Imports by Morocco, Türkiye, Iran, Syria, Uzbekistan, Algeria, and the United Kingdom are expected to decline following significant rebounds in local production. Indonesia and Egypt are tied as the world’s largest wheat importers, with forecasts of 12.5MMT apiece.
Russia is expected to retain its mantle as the world’s largest exporter, followed by the EU, Canada, Australia, and the United States. The USDA’s Russian export forecast of 47.0MMT is 1.0MMT higher than the current season, despite the 4.3MMT drop in production, with a 3.1MMT increase in opening stocks cushioning the supply equation.
The same scenario applies to the EU. Exports were bumped 0.5MMT higher, despite the harvest decrease, with a 5.6MMT increase in opening stocks maintaining a relatively stable supply scenario for the 2026/27 marketing year. The USDA has Australia slated for 23.0MMT of wheat exports next season, down from 26.0MMT this season, a fair assumption at this point in the cycle given the lower production outlook and buoyant domestic demand.
With the North American wheat supply scenario 16.5MMT to the worse season-on-season, and opening stock only 3.9MMT higher, it is quite surprising to see the USDA reduce exports by only 5.7MMT for Canada and the US combined. The Canadian task in 2026/27 is 28MMT, compared to 30MMT in the current marketing year, while the US program is 21.7MMT, compared to 24.8MMT.
Global wheat stocks at the end of the 2026/27 marketing year are forecast at 275MMT, down from 279.2MMT at the end of the current marketing year, and well below the recent peak of 299.4MMT in 2019/20. However, the drawdown is far more pronounced among the eight major exporters, falling from 77.7MMT at the end of next month to 65.8MMT on June 30 next year, but still well above 2019/20 ending stocks of 59.5MMT for the same group. The biggest decrease occurs in the US, with demand outstripping supply by 4.7MMT across the 2026/27 season.
Call your local Grain Brokers Australia representative on 1300 946 544 to discuss your grain marketing needs.
Written by Peter McMeekin.
