USDA increased consumption forecast and reduced world wheat stock forecast in 2026/27 MY

In the July WASDE report for 2026/27 MY, USDA experts lowered the estimate of stocks due to an increase in the consumption forecast, but stock quotes rose sharply due to restrictions on shipping from the Russian Azov ports, which provide a quarter of Russian wheat exports. After very successful strikes by Ukrainian drones, the Russian Federation restricted the passage of ships through the Don-Azov Canal and stopped accepting applications for passage through the Kerch Strait.

On Friday, September wheat futures rose:

• by 3.3% to $235.25/t for SRW wheat in Chicago (+9.1% since the June report);
• by 3.4% to $248.5/t for HRW wheat in Kansas City (+7%);
• by 2.1% to $240.1/t for HRS wheat in Minneapolis (+5.3%);
• by 5.5% to €216.25/t or $246.9/t - on Euronext in Paris (+6.5%).

It should be noted that December futures are trading $5-7/t more expensive than September futures, which indicates the market's expected deterioration in the global balance and increase in demand.

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

• The forecast for initial wheat stocks has been reduced by 0.9 million tons to 279 (259.9 in 2025/26 MY) million tons.
• The forecast for world production remained almost unchanged at 819.97 (847.77) million tons, although estimates for Canada were reduced by 1 million tons to 34 million tons (40 million tons), the USA by 0.2 to 41.8 (54) million tons, and forecasts for the Russian Federation were increased by 0.5 to 88.5 (90.3) million tons and Ukraine by 0.5 to 24 (24.1) million tons. At the same time, the forecast for wheat production for the EU was left unchanged, although against the backdrop of the heat in France and Spain, Coceral analysts reduced wheat harvest estimates in the EU and the UK by 2.9 million tons to 140.8 million tons.
• The forecast for global wheat consumption has been increased by 1.57 million tonnes to 826.16 (824.6) million tonnes, mainly due to increased consumption in India, Yemen, Saudi Arabia and Somalia.
• The forecast for global wheat imports has been increased by 0.88 million tons to 208.17 million tons, which will be significantly lower than the 2025/26 MY figure (222 million tons) due to a good harvest in importing countries.
• The forecast for world exports has been increased by 1.1 million tons to 213.1 million tons (227.1 million tons in the 2025/26 MY), in particular for Ukraine - by 0.5 million tons to 14.5 million tons (14 million tons), the Russian Federation - by 0.5 to 47.5 (48) million tons, and Argentina - by 0.5 to 15 (18.5) million tons.
• Against the backdrop of reduced initial stocks and increased consumption, the estimate of global ending wheat stocks in the 2026/27 MY has been reduced by 2.58 million tons to 272.84 million tons, which will be 5 million tons lower than the 2025/26 MY figure.

Good rainfall in Argentina and Australia continues to improve the prospects for the new harvest, so speculative premiums for December futures will decline, but prices will remain influenced by news of the suspension of exports from the Russian Federation in the coming weeks.