USDA again sharply raised forecasts for global wheat production and ending stocks for 2025/26 MY, but prices barely reacted to such a bearish report

In the December supply and demand balance, experts from the United States Department of Agriculture (USDA) again, as in the November report, sharply increased forecasts for world wheat production, consumption, and ending stocks in the 2025/26 MY, but the market reacted quite calmly to this, as the changes correspond to previously published official data on increased harvest forecasts in Canada, Australia, and the EU.

December wheat futures in the US barely reacted to the improvement in the global balance, and even grew by 1-2.9% over the month. Yesterday they had the following dynamics:

• increased by 0.01% to $197/t – for SRW wheat in Chicago (+1.7% after the release of the November report);
• decreased by 0.1% to $191.16/t – for HRW wheat in Kansas City (+1%);
• decreased by 0.1% to $214/t – for HRS wheat in Minneapolis (+2.9%);

March wheat futures on Euronext in Paris fell 0.3% to €190.25/t or $221.2/t (+1%).

Compared to November 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 8.92 million tons to a new record of 837.81 million tons (800.77 million tons in 2024/25 MY), in particular for Canada – by 2.96 to 39.96 (36) million tons, Argentina – by 2 million tons to 24 (18.51) million tons, Australia – by 1 to 37 (34.1) million tons, the EU – by 1.7 to 144 (122.15) million tons, the Russian Federation – by 1 to 87.5 (81.6) million tons. For Ukraine, the forecast has been left at 23 (23.4) million tons. The forecast for world wheat production in the last three reports has been increased by 31.12 million tons (in September – by 9.3 million tons, in November – by 12.89 million tons, and in December – by 8.92 million tons).
• The forecast for global wheat consumption has been increased by 4.07 million tonnes to 822.97 (810.77) million tonnes due to greater use of feed and residues in exporting countries.
• The forecast for world exports has been increased by 1.5 million tons to 218.7 (210.1) million tons, in particular for Canada – by 1 million tons to 28 (29.3) million tons, Australia – by 1 million tons to 27 (23.7) million tons, Argentina – by 0.5 million tons to 14.5 (13) million tons, which compensates for the reduction in exports from Ukraine by 0.5 million tons to 14.5 (15.75) million tons due to low shipment rates and increased competition in the second half of the season.
• The forecast for global imports has been increased by 1.47 million tons to 214.39 (200.3) million tons due to increased supplies to Southeast Asian and North African countries.
• The forecast for ending wheat stocks has been increased by 3.4 million tons to 274.87 (260) million tons, mainly due to increased stocks in exporting countries.

The wheat balance for the US and China has not changed compared to the November assessment, so the markets reacted rather restrainedly to such significant changes in the world balance, although the main pressure of increasing world production and supply of wheat will be felt by the market in the spring of 2026, when the prospects for the new crop will become clear and significant stocks of the old crop will remain unsold.

Price pressure will also increase as Argentina reduces export duties on grain, which will help increase supplies.

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