USDA lifts 2025-26 global wheat stocks forecast as higher output offsets record demand
Global wheat supplies are rising as USDA lifts 2025-26 ending stocks and production forecasts, driven by record crops in Canada, Argentina and other exporters. Consumption and trade also increase, but markets react mildly as data was expected. Heavy fund short positions and ample supply suggest mostly sideways price movement ahead.
The US Department of Agriculture (USDA) has raised its forecast for 2025-26 global wheat ending stocks, reinforcing expectations of ample supply despite record consumption and steady trade growth.
In its Dec. 9 World Agricultural Supply and Demand Estimates (WASDE) report, the USDA pegged world wheat carryover at 274.9 million tonnes, up 3.4 million tonnes, or 1.3%, from November and 14.8 million tonnes, or 6%, above the estimated 260.03 million tonnes in 2024-25. If realized, the carryover would be the ninth-largest on record.
Alongside higher stocks, the USDA lifted its outlook for global wheat supplies, consumption and trade. Wheat futures reacted in mixed fashion after the report, reflecting that much of the updated data had already been priced in.
“The thing is the market knew all this, it wasn’t anything that we didn’t already anticipate,” said Mike O’Dea, risk management consultant for StoneX in Kansas City.
“Because of all the production numbers we’ve seen coming out of Australia and Argentina, and we figured they would raise the Russian crop, so that was already baked in the market. Wheat’s stuck and not going anywhere for a while.”
The USDA raised its 2025-26 global wheat production forecast to 837.81 million tonnes, up 8.92 million tonnes from November and 37.04 million tonnes, or 5%, above 2024-25 levels.
Canada’s wheat crop was increased by 3 million tonnes to a record 40 million tonnes, based on final production data from Statistics Canada. Argentina’s output was lifted by 2 million tonnes to a record 24 million tonnes, reflecting favorable growing conditions, particularly in Buenos Aires province.
Production estimates were also raised for the European Union to 144 million tonnes, Australia to 37 million tonnes, and Russia to 87.5 million tonnes.
On the demand side, world wheat consumption in 2025-26 is now forecast at a record 823 million tonnes, up 4.1 million tonnes from November and 12.2 million tonnes year on year.
The increase reflects higher feed and residual use in Argentina, Canada, the EU and Ukraine.
“USDA solves for the bottom line, they don’t solve for what we think. They put a number out, they solve within the balance sheet for the number they want at the bottom. They had to raise demand because of the production,” O’Dea said.
Global wheat exports for 2025-26 were forecast at 218.71 million tonnes, up 1.5 million tonnes from November and 8.53 million tonnes from 2024-25.
The increase was based on higher export forecasts for Australia (up 1 million tonnes from November), Canada (up 1 million), and Argentina (up 500,000 tonnes), which more than offset reductions for Turkey and Ukraine, the latter down 500,000 tonnes from November.
There were no changes from November for the US portion of the WASDE report.
The USDA forecast US wheat exports in 2025-26 at 24.49 million tonnes, unchanged from November but up 2 million tonnes from 2024-25. The US wheat trade estimate is likely to be raised by the USDA, perhaps as soon as next month, O’Dea said.
One of the key areas of the wheat market to watch in 2025 has been investment funds and their shorts in wheat futures, which reached record levels at times. That feature remains one to watch for market participants, even as funds have slowly reduced those short positions.
“Funds are getting caught up, but it’s still pretty stale,” O’Dea said. “They’re about where we expected from the time we’re looking at. We think the funds have started to re-engage and started selling more. I think they’ve short-covered a little bit now, they’re probably adding back to their short side.”
As to the direction of wheat markets into the first quarter, O’Dea suggested wheat futures might find some support against recent lows, but the overall trend could be further sideways movement.
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Source : Ukr Agro Consult
