Increased forecasts for global wheat production and stocks in the USDA report lowered quotes, despite reduced export forecasts from Ukraine and the Russian Federation

Wheat stock quotes rose sharply yesterday amid powerful strikes on Russian grain terminals in Novorossiysk and the suspension of their operations.

In the September supply and demand report, USDA experts significantly raised crop forecasts in Australia and Canada, which will increase global production and lead to an increase in ending stocks, increasing pressure on quotes.

USDA experts have lowered wheat export forecasts from the Russian Federation and Ukraine by 3 and 1 million tons respectively, which corresponds to the loss of export potential from these countries in just the first two months of the season. However, the blocking of supplies from Black Sea ports continues, so quotes will receive further support, although they have already grown by 8.3-9.3% per month.

Wheat balance forecasts for the US remained unchanged, so traders reacted only to the world balance data.

On Friday, September wheat futures fell:

• by 2.6% to $259.8/t for SRW wheat in Chicago (+8.3% to the level after the release of the August report);
• by 1% to $288.1/t for HRW wheat in Kansas City (+8.8%);
• by 1.8% to €241/t or $280/t - December wheat futures on Euronext in Paris (+9.3%).

At the same time, HRS wheat futures in Minneapolis increased by 0.4% to $268.3/t (+8.5%).

December futures are still trading $6-7/t higher than September futures, amid expectations of continued blockade of exports from the Black Sea.

Compared to August estimates, the world wheat balance for the 2026/27 MY has undergone the following changes:

• The estimate of initial wheat stocks was increased by 0.38 million tons to 280.6 (260.48 in 2025/26 MY) million tons.
• The forecast for world production has been increased by 3.1 million tons to 822.43 (843.4) million tons, including for Australia - by 3 to 31 (36) million tons, Ukraine - by 0.6 to 26 (24.1) million tons, Canada - by 1 to 36 (40) million tons, Argentina - by 0.5 to 21.5 (27.9) million tons, which compensates for the decrease in forecasts for Kazakhstan by 1 to 15 (19.4) million tons, the EU - by 0.4 to 133.8 (145.1) million tons and the Russian Federation - by 0.5 to 88 (90.3) million tons.
• The estimate of global wheat consumption was increased by 0.48 million tons to 826.75 (823.6) million tons.
• The forecast for global wheat imports has been reduced by 0.8 million tons to 207.68 million tons due to reduced exports to North African countries due to reduced supplies from the Black Sea region, a good domestic harvest, and rising prices.
• The forecast for world exports has been reduced by 1 million tons to 211.7 million tons (227.4 million tons in 2025/26 MY), in particular for the Russian Federation - by 3 to 43 (48) million tons, Ukraine - by 1 to 12.5 (14) million tons, Kazakhstan - by 0.5 to 9.5 (11.5) million tons, which will be offset by an increase in exports from Canada by 1.5 million tons to 30 (29.8) million tons, Australia - by 1.5 to 23.5 (24) million tons, Argentina - by 0.5 to 15.5 (19.1) million tons.
• The estimate of world ending wheat stocks has been increased by 3.04 million tons to 273.28 million tons, which will be 4.3 million tons lower than the 2025/26 MY figure. Stocks will grow the most in the Russian Federation - by 2.5 to 16.09 (12) million tons and Ukraine - by 1.3 to 6.1 (2) million tons.

Wheat importers are postponing purchases until later in anticipation of the resumption of exports from Black Sea ports and the unblocking of the Persian and now Bab el-Mandeb Straits.

It should be taken into account that deliveries of the new crop from Canada in October and from Argentina and Australia in November-December may coincide in time with a partial resumption of exports from the Black Sea ports of the Russian Federation and Ukraine (since negotiations are promised for October), which will sharply increase supply on the market and collapse prices at the end of the year.