Wheat production falls, pressure on stocks

The global wheat market is heading towards lower production, slightly declining consumption and shrinking stocks once again in the 2026/27 season. This is according to the latest WASDE forecast from the United States Department of Agriculture (USDA). Smaller harvests are expected particularly in major exporting countries such as the United States, the European Union, Argentina and Australia.Global wheat production for 2026/27 is forecast at 819.1 million tonnes. That is significantly lower than the record crop of 843.8 million tonnes in 2025/26. The decline is mainly due to lower yields in the major exporting countries.Russia remains by far one of the key players on the global market. Russian production is estimated at around 81.6 million tonnes, allowing the country to retain its position as the world’s largest wheat exporter. The European Union is expected to produce around 121 million tonnes, while Canada is forecast at nearly 36 million tonnes.In Australia, production is set to fall to around 30 million tonnes, compared with more than 34 million tonnes a season earlier. Argentina is also expected to see a smaller crop, although the country remains an important supplier to the global market.The United States is seeing one of the sharpest declines. US wheat production is forecast at 42.5 million tonnes, well below the approximately 53.9 million tonnes recorded in 2025/26. According to the USDA, this is due to reduced planted acreage and lower yields per hectare.Consumption remains highDespite the smaller harvest, global demand for wheat remains firm. Total consumption for 2026/27 is forecast at 823.2 million tonnes. That is only slightly lower than in the previous season.The decline is mainly linked to lower wheat use in animal feed, as production falls in several countries. At the same time, usage for food, seed and industrial purposes continues to grow.India plays an important role in this development. The country is increasing domestic wheat consumption due to population growth and greater wheat availability through the public distribution system.China also remains a key player in the global market. The country produces around 140 million tonnes of wheat and continues to be both the world’s largest producer and consumer (148 million tonnes).Global stocks continue to declineAccording to the USDA forecast, global ending wheat stocks will fall to 275 million tonnes. That represents a decline of around 4 million tonnes compared with the previous season.Although global stocks remain historically relatively high, the buffer outside China continues to shrink. Chinese inventories remain very large, while exporting countries have less room to manoeuvre.Stocks held by the major exporters are expected to rise slightly to around 43 million tonnes, but ending stocks in the United States are forecast to decline sharply to approximately 20.7 million tonnes. This supports expectations of higher US wheat prices.Trade declines due to higher production in importing regionsGlobal wheat trade is forecast at 211.7 million tonnes, around 12 million tonnes lower than in 2025/26. North Africa and the Middle East in particular are expected to import less wheat as local production improves.Russia remains the world’s largest exporter, followed by the European Union, Canada, Australia and the United States. Despite smaller harvests, these countries maintain their dominant position in international trade.Market remains sensitive to weather and geopoliticsLower production and declining stocks leave the wheat market vulnerable to new weather-related problems or geopolitical tensions. Developments in Russia, the Black Sea region and North America in particular will continue to play a decisive role in price formation in the months ahead.In addition, the market remains closely focused on the export capacity of Russia and Ukraine, as these countries together account for a significant share of global wheat trade. With consumption once again exceeding production, the global wheat balance in 2026/27 remains relatively tight. As a result, the risk of price volatility remains high, especially if weather conditions deteriorate in key production regions.