USDA again lowered forecasts for global wheat production and stocks, but quotes fell under pressure from falling corn prices
In the August supply and demand report, USDA experts lowered the forecast for global wheat production and ending stocks for the 2025/26 MY to the lowest level since 2015/16.
Despite the worsening balance, wheat stock quotes fell by 1-2% and are trading 3.7-7% cheaper than a month ago, responding to the “explosive” updated world corn balance, in which USDA experts immediately increased the production forecast for the US by 26 million tons.
September wheat futures fell after the report was released:
- by 2% to $185.6/t - for SRW wheat in Chicago (-7% since the release of the July report);
- by 1.7% to $187.7/t – for HRW wheat in Kansas City (+1.3%);
- by 0.1% to $212.1/t – for HRS wheat in Minneapolis (-3.7%);
- by 1% to €192.75/t or $225.2/t – for wheat on Euronext in Paris (-4.3%).
The forecast for world wheat production has been reduced by 1.65 million tons, in particular for China by 2 million tons to 140 (140.1) million tons, Brazil by 0.5 million tons to 7.5 (7.9) million tons, Argentina by 0.3 million tons to 19.7 (18.5) million tons, which is only partially offset by an increase in the forecast for the EU by 1 million tons to 138.25 (122.2) million tons, and will be the highest figure since 2021/22.
It is worth noting that the production forecast for Ukraine has not been changed, although local analysts have already lowered their estimates to 19.5-21 million tons due to adverse weather.
Changes in the wheat balance for 2025/26 MY, million tons:
|
Indicator |
August 2025 |
July 2025 |
Difference |
Comment |
|
Beginning stocks |
262.7 |
263.59 |
-0.89. |
due to reduction in initial reserves for Ukraine, Saudi Arabia and the Philippines |
|
World production |
806.9 |
808.55 |
-1.65 |
|
|
World consumption |
809.53 |
810.62 |
-1.09 |
due to reduced use of wheat for feed in China, Indonesia and the Philippines, which is only partially offset by higher use in the EU, as feed maize is cheaper and more available |
|
World exports |
213.53 |
213.06 |
+0.47 |
due to an increase in exports from the USA by 0.7 million tons |
|
World imports |
209.46 |
208.84 |
+0.62 |
|
|
Ending stocks |
260.08 |
261.52 |
-1.44 |
|
The forecast for ending wheat stocks has been reduced for exporting countries - the USA by 0.6 million tons to 23.64 (23.15) million tons and Ukraine - by 0.66 million tons to 0.93 (0.93) million tons.
Further deterioration in the global wheat balance will increase demand from importers, so we will soon see food wheat prices rise. But a sharp increase in the corn production forecast will limit the rise in feed wheat prices.
