USDA slightly changed the world wheat balance for 2025/26 MY, but increased the production forecast for Ukraine and lowered the export estimate

In the March supply and demand report, USDA experts slightly changed the world wheat balance for the 2025/26 MY, but stock quotes fell sharply yesterday under the pressure of a significant drop in oil prices and a decrease in speculative demand, which led to a 7.7-12.5% increase in wheat prices per month against the backdrop of the US and Israel's war against Iran. At the same time, the balances for the US and China were left unchanged.

Compared to February estimates, the world wheat balance for the 2025/26 MY has undergone the following changes:

• The forecast for world wheat production has been increased by 0.32 million tons to 842.12 million tons (800.43 million tons in 2024/25 MY), in particular for Ukraine - by 1 million tons to 24 (23.4) million tons and Kazakhstan - by 0.43 million tons to 19.33 (18.6) million tons, which compensates for the decrease in production in Australia by 1 million tons to 36 (34.11) million tons according to statistical data from local agencies.
• The forecast for global wheat consumption has been increased by 0.74 million tonnes to a new record level of 824.8 (810.24) million tonnes due to an increase in EU feed wheat consumption by 1 million tonnes.
• The forecast for world exports has been increased by 0.2 million tonnes to 222.16 (210.47) million tonnes, in particular for Argentina – by 1.5 million tonnes to 19.5 (13.3) million tonnes due to the lowest prices in the world and for Kazakhstan – by 0.8 million tonnes to 10.5 (10.2) million tonnes, which compensates for the decrease in the estimate for the EU by 1 million tonnes to 30.5 (27.9) million tonnes, the Russian Federation – by 0.5 million tonnes to 43.5 (43) million tonnes and Ukraine – by 0.5 million tonnes to 13.5 (15.75) million tonnes due to the low rate of shipments. It should be noted that according to the European Commission, from July 1 to March 8, the EU exported only 16.5 million tonnes of soft wheat, so over the next 4 months of the season it will be necessary to export another 14 million tonnes, which is almost unrealistic.
• The forecast for world imports has been increased by 0.3 million tons to 218 (201.3) million tons, primarily for Southeast Asian countries.
• The forecast for ending stocks was reduced by 0.55 million tons to 276.96 (259.63) million tons, mainly due to a decrease in stocks in Argentina by 1 million tons and Australia by 1 million tons, however, the estimate of stocks in Ukraine was increased by 1.5 million tons to 3.13 (0.93) million tons and the Russian Federation by 0.5 million tons to 15.19 (10.6) million tons.

After the report was released, March wheat futures fell in price:

• by 2.3% to $214.9/t - for SRW wheat in Chicago (+10.7% per month);
• by 1.9% to $219.3/t – for HRW wheat in Kansas City (+12.5%);
• by 2% to $228.6/t – for HRS wheat in Minneapolis (+9.5%);
• by 2.8% to €204/t or $237.1/t - for wheat on Euronext in Paris (+7.7%).

It is worth noting that world wheat stocks have reached a 5-year high, and if the blockade of the Persian Gulf continues, the pace of exports will decrease, which will lead to a further increase in stocks at the beginning of the new season.