Despite record global harvests, SovEcon CEO Andrey Sizov warns that the world is not awash with wheat. Speaking at Global Grain Geneva 2025, he challenged the “glut narrative,” pointing instead to resilient demand, tightening Black Sea exports, and signs of a renewed price uptrend.

At Global Grain Geneva 2025, Andrey Sizov, CEO of SovEcon, delivered a closely watched keynote, offering a sharp counterpoint to the widespread bearish sentiment dominating wheat markets in early autumn. Speaking to a packed audience, Sizov argued that the so-called “wheat glut” narrative was inconsistent with both price action and underlying fundamentals. “When we talk about an oversupply of wheat, the numbers simply don’t confirm it,” Sizov said. “We have big crops, yes—but also strong consumption and constrained export availability in key regions.”

PRICES REBOUND AS VOLATILITY RETURNS

Sizov noted that when he gave an interview to Miller Magazine in early October, Chicago wheat futures were hovering near $5 per bushel and volatility was at a multi-year low. “That level of calm didn’t fit the market fundamentals,” he recalled. Just weeks later, CBOT wheat rallied about 10%, while volatility surged by nearly 50%. FOB export prices in the Black Sea and Europe also turned higher, disproving expectations that the August–September decline would persist into the winter.

At present, FOB Black Sea wheat trades roughly between $200 and $250 per ton, within the mid-range of the long-term channel. Sizov emphasized that this stability underscores a more balanced market structure than many assume.

RUSSIA’S UNEVEN CROP AND LIMITED EXPORT CAPACITY

Sizov explained that although Russia harvested a “relatively good” wheat crop, the situation was far from uniform. Severe drought and poor weather during the previous season left southern regions—the country’s export heartland—in difficult condition. “Southern Russia, which normally produces 30–40% of total wheat output, recorded its lowest yields in a decade,” Sizov said.

Meanwhile, regions like Siberia and the Volga produced strong crops, but their distance—up to 3,000 kilometers from ports—makes that grain economically unviable for export. The result: inland stocks are high, but exportable supplies near ports remain tight.

This imbalance explains the slow start to Russia’s export campaign earlier in the season. Yet, in recent weeks, shipments have accelerated sharply—not at lower, but at higher prices. “That tells us demand is recovering,” Sizov noted. SovEcon expects Russia’s export pace to remain strong through November.

STOCKS-TO-USE RATIOS REMAIN TIGHT

According to SovEcon, both wheat and corn exports are set to increase this year amid strong global consumption. Despite record-large crops, stocks-to-use ratios among major exporters remain near 12%—well below levels typical of an oversupplied market.

Based on long-term relationships between inventories and prices, Sizov said the fair value for FOB wheat lies around $250 per ton, while U.S. wheat prices should trade closer to $5.50 per bushel, not below $5. “We’re not in an oversupply situation,” he stated. “The fundamentals argue for stability, not collapse.”

SovEcon expects the global wheat market to trend modestly higher into early 2026, potentially reaching $240–250 per ton. Any near-term dip toward $220–225 per ton could represent a buying opportunity for importers and millers.

BETTER WEATHER, SMALLER AREA

Looking ahead, Sizov described the Northern Hemisphere’s early crop conditions as mostly favorable. The U.S. Midwest and Kansas have seen average precipitation, while France—Europe’s top exporter—has faced dryness but is forecast to receive rains soon. In the Black Sea, abundant rainfall is supporting strong winter wheat establishment in both Russia and Ukraine.

However, the Russian wheat area is expected to remain flat or slightly lower year-on-year. The spring wheat area—about one-third of total wheat—continues to shrink due to export tax policies. SovEcon’s first estimate for Russia’s 2026 crop stands at 83.8 million tons (down four million tons from 2025), with a pessimistic scenario of 80 Mt and an optimistic one of 88 Mt.

CHINA’S CHANGING ROLE IN GLOBAL DEMAND

Sizov identified China as both a short-term and long-term swing factor for global grain markets. In recent months, Chinese wheat and corn imports have weakened, and this could persist. The reasons are structural: China’s population is declining, meat consumption per capita is flattening, and the government is investing heavily in food self-sufficiency through technology and productivity gains.

China’s grain output has already risen by 50 million tons in four years, while feed efficiency has improved. With dietary shifts from pork to poultry and beef—both less feed-intensive—grain and oilseed import demand could gradually decline over the coming years.

GEOPOLITICS: FRAGILE TRUCE AND LOW BLACK SEA RISK PREMIUM

Commenting on geopolitics, Sizov said the much-touted U.S.–China grain deal announced earlier by Washington remains unconfirmed by Beijing and appears to be a temporary truce rather than a long-term agreement. Tariffs and export controls remain “on pause,” not resolved.

Turning to the Black Sea, he reminded the audience that despite the ongoing war, Russia’s and Ukraine’s major ports remain operational, and production has been only marginally affected. “Ceasefire odds are still very low,” Sizov noted. “Neither side sees diplomacy as more beneficial than the battlefield.”

While the Black Sea risk premium is near zero, Sizov cautioned that any meaningful escalation could have “huge price implications,” similar to the dramatic surge in 2022 when wheat prices more than doubled. “It’s a low-probability but high-impact scenario that the market cannot ignore,” he warned.

MARKET OUTLOOK: CAUTIOUS OPTIMISM

Summing up, Sizov reaffirmed his stance that market fundamentals are stronger than sentiment suggests. “The wheat-glut narrative does not match reality,” he concluded. “Demand remains resilient, exporter stocks are low, and the Black Sea market is tightening again.” With volatility back and geopolitical risks simmering, the SovEcon chief expects firmer prices and more balanced market conditions as the 2025/26 season unfolds.