USDA sharply raises global wheat production and ending stocks forecasts for 2025/26 MY, putting pressure on global prices

In October, the USDA did not release its monthly supply and demand report due to the government shutdown, so the November report came as a big surprise to the market.

In the new supply and demand balance, USDA experts sharply increased forecasts for global wheat production, consumption, and ending stocks in the 2025/26 MY, which led to a drop in quotes to a 2-month low.

Thus, the production forecast in the last two reports was increased by 22.2 million tons (in September - by 9.3 million tons, in November - by 12.89 million tons) due to harvest data.

Amid improving global balance in new report, December wheat futures fell:

• by 1.6% to $193.7/t - for SRW wheat in Chicago (+0.6% after the release of the September report);
• by 2.1% to $189.3/t – for HRW wheat in Kansas City (+0.1%);
• by 0.9% to $207.9/t – for HRS wheat in Minneapolis (-1.3%);
• by 0.7% to €188.25/t or $218.8/t – for wheat on Euronext in Paris (-0.3%).

Compared to September 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 12.69 million tons to a record 828.89 million tons (800.79 million tons in the 2024/25 MY), in particular for Argentina - by 2.5 million tons to 22 (18.51) million tons, Australia - by 1.5 to 36 (34.1) million tons, the USA - by 1.55 to 54 (53.85) million tons, the EU - by 2.2 to 142.3 (122.15) million tons, the Russian Federation - by 1.5 to 86.5 (81.6) million tons, Canada - by 1 to 37 (36) million tons, Kazakhstan - by 2.9 to 18.9 (18.6) million tons. For Ukraine, the forecast has been left at 23 (23.4) million tons.
• The forecast for global wheat consumption has been increased by 4.34 million tonnes to 818.9 (810) million tonnes due to greater use of feed and residues in exporting countries: the EU, the Russian Federation and Kazakhstan.
• The forecast for world exports has been increased by 2.5 million tons to 217.2 (209.7) million tons, in particular for Australia – by 1 million tons, Argentina – by 1 million tons, Kazakhstan – by 1 million tons and the EU – by 0.5 million tons, which more than compensates for the reduction in exports from the Russian Federation by 1 million tons to 44 (43) million tons. For Ukraine, the export forecast has been left at 15 (15.75) million tons due to low export rates at the beginning of the season.
• The forecast for world imports has been increased by 2.46 million tons to 212.92 (200.2) million tons.
• The estimate of ending wheat stocks has been increased by 7.4 million tonnes to 271.4 (261.4) million tonnes, mainly due to increased stocks in exporting countries, which will lead to the first annual increase in world wheat stocks since 2019/20 MY.

Such forecasts, as well as the start of harvesting and increased wheat supply from Argentina and Australia in December, will further reduce wheat demand from importers, who will expect corn and wheat prices to fall under the pressure of huge supply.