USDA forecasts see global grain markets rally after report
The USDA’s latest WASDE report forecasts lower global wheat production and tighter ending stocks, supporting wheat prices. US wheat output could fall to a 50-year low due to reduced planting and drought. Global maize stocks are also expected to decline, increasing sensitivity to weather-related supply risks.
In its latest World Agricultural Supply and Demand Estimates (WASDE) report, the USDA projected a decline in global wheat production, driven in part by a sharp fall in US output prospects.
According to analysts at the Agricultural and Horticultural Development Board, wheat futures strengthened following publication of the report, with traders reacting to lower-than-expected stock estimates.
The USDA estimated global wheat ending stocks for both the 2025/26 and 2026/27 marketing years below average trade expectations by 3.7 million tonnes and 5.5 million tonnes respectively.
For 2026/27, world wheat ending stocks are forecast at 275 million tonnes, down 4.2 million tonnes on the previous season.
The outlook for the United States has been a major factor behind the firmer market tone. USDA forecasts suggest US wheat production in 2026/27 could fall to its lowest level in more than 50 years due to reduced plantings and continuing drought across the US Plains.
Tighter projected stocks are expected to leave markets increasingly sensitive to weather threats and supply disruptions in the months ahead.
However, AHDB analysts noted that global wheat ending stocks remain 1.3% above the five-year average, which may help cap any major upward movement in prices unless weather risks intensify further.
The maize market is also facing tighter supply expectations. Global maize ending stocks for 2026/27 are forecast to fall 6.5% year-on-year and sit almost 9% below the five-year average.
If realised, it would mark the lowest level of global maize ending stocks since the 2013/14 season.
Despite larger projected soybean and rapeseed stocks compared with historic averages, oilseed markets are continuing to find support from stronger crude oil prices and sustained biofuel demand.
Weather conditions remain the dominant factor for grain markets. Analysts said winter wheat conditions in the northern hemisphere, particularly in the US, will continue to influence price direction in the coming weeks.
For maize, attention is focused on Brazil’s second crop, alongside planting progress in the US, the EU and Ukraine.
Chicago and Paris maize futures recorded smaller gains than wheat markets following the WASDE release, after global maize stocks for 2025/26 came in above trade expectations.
That has helped limit gains in UK feed wheat futures compared with international milling wheat markets.
The premium between UK milling wheat and feed wheat continues to depend heavily on domestic crop size and quality, as well as wider global trends.
Poor US winter wheat conditions are continuing to underpin milling wheat values internationally, with potential knock-on impacts for UK grain markets later in the season.
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Source : South West Farmer
