Bearish Wheat Outlook From the USDA

The United States Department of Agriculture (USDA) released its initial global wheat outlook for the 2025-26 season last week, projecting increased production, consumption, and international trade compared to the current year. The May edition of the USDA’s World Agricultural Supply and Demand Estimates provides the first official projections for the upcoming crop marketing year, offering key insights into global supply and demand trends.

Global wheat production is forecast to reach a record 808.5 million tonnes (Mt), up from 799.7 Mt this season and 792 Mt in 2023-24. Combined with a carry-in of 265.2 Mt, the total supply is estimated at 1,073.7 Mt, a 4.9 Mt increase year-on-year, driven by a 1.1 percent rise in output. The European Union is expected to see the largest production increase, with wheat output projected at 136 Mt, up 11.4 percent from 2024-25, supported by a 6 percent increase in harvested area to 24 million hectares and a yield of 5.67 tonnes per hectare.

In Canada, wheat production is estimated at 36 Mt, a rise from 35 Mt last year, with a harvested area of 10.9 million hectares and a yield of 3.3 tonnes per hectare. The USDA notes: “With favorable soil-moisture conditions across most cropping areas and spring planting well advanced, the current estimate could be conservative if conditions remain supportive.” Russia’s wheat crop is projected at 83 Mt, up from 81.6 Mt, though Black Sea analyst Andrey Sizov cautions: “Many analysts, including the USDA, may be too optimistic about Russia’s new wheat crop.” Australia’s output is forecast at 31 Mt, with planting progress varying due to dry conditions in some regions.

Global wheat consumption is expected to reach 808 Mt in 2025-26, up from 803.6 Mt this season. Demand from major importing countries is projected to rise slightly to 329.6 Mt, with increased consumption in Asia and the Middle East. International trade is anticipated to grow to 213 Mt, up from 206.1 Mt, with major exporters contributing 158.5 Mt. Key exporters include the EU (34 Mt), Russia (45 Mt), Canada (27 Mt), Australia (23 Mt), and the US (21.8 Mt). Egypt remains the top importer at 13 Mt, followed by Indonesia at 12 Mt.

Despite the optimistic outlook, dry conditions in northern Europe, parts of the US, Ukraine, Russia, and Australia could affect yields. In China, Henan province authorities warned: “Risks to grain fill due to hot, dry winds this month may impact the 142 Mt forecast.” India’s wheat production is estimated at 117 Mt, though local estimates suggest a slightly lower figure.