Markets are mispricing grain risk. Tight wheat balances, shifting flows and a slower China will shape 2025/26, says Andrey Sizov, Managing Director of SovEcon.
Andrey Sizov
Global grain markets may look calm, but underlying risks remain. SovEcon’s Managing Director Andrey Sizov, a leading authority on global grain markets, cautions that multi-year lows in prices and volatility are lulling market participants into a false sense of security. In this exclusive preview of his upcoming keynote at Global Grain Geneva, Sizov highlights why tight wheat balances, shifting trade flows, and a cooling China could make 2025/26 far more challenging than many expect—and why complacency is the greatest danger millers and traders face today.
The Black Sea remains a pivotal force in global grain trade. How do you see its role evolving in 2025/26, given geopolitics, logistics and policy?
Over recent decades, the Black Sea has become one of the world’s key grain hubs—especially for wheat. The drivers were deregulation, favourable climate, rich soils, and proximity to large wheat-reliant importers in the Middle East and North Africa.
Most of these advantages still hold. However, Russian production appears to be gradually declining, pressured by strict export taxes introduced in 2021—effectively costing farmers tens of percent of revenue—alongside unfavourable weather in recent seasons. Ukraine’s output fell sharply after the war began due to reduced plantings, yet production has been relatively stable recently as the farming sector proved more resilient than many expected. Meanwhile, Romania and Bulgaria are becoming more visible players thanks to rising production and infrastructure investment—particularly around Constanța. Reflecting this trend, CME launched the CVB (Constanța/Varna/Burgas) wheat contract to capture Black Sea pricing more directly.
Markets have been highly reactive to conflict, climate and currency swings. What are the most under-appreciated risks millers and traders should prepare for?
Complacency. Many seem convinced the bear market in grains will last indefinitely. Prices are at multi-year lows, and in September the implied volatility (IV) for CBOT wheat hit its lowest level since November 2020. Does that align with bullish wheat fundamentals, where global stocks-to-use are historically low? No. Does it align with the reality of an ongoing war in the Black Sea—the world’s major wheat export hub? Also no. Does it align with still-elevated inflation? Again, no.
It’s hard to pinpoint the exact trigger from here, but today’s IV and price levels do not adequately reflect the underlying risk landscape.
Shifting trade routes and new alliances are reshaping flows. Which emerging corridors or partnerships could redefine ag supply chains in the next 12 months?
The US–China trade war is the number-one global ag trade story. This time, Beijing appears prepared for a long game. As of late September, China seems well covered on soybean needs after aggressive purchases from South America. They notably boosted imports from Brazil following the first trade war under President Trump (2018–2020).
For the new season, they have bought essentially zero US ag products and may be content to wait. If President Trump only visits Beijing in early 2026, as he said recently, that could imply no comprehensive deal before then. Beijing likely prefers to drag the issue into 2026, when the administration could be in a weaker position heading into the November midterms.
Global trade flows will adapt to Trump’s hectic trade policies by rerouting: fewer US beans to China, but potentially more to the EU—and perhaps even to South America as well—though the new regime is likely to be less efficient and more costly for the world.
Looking beyond near-term shocks, what single long-term global factor matters most for prices in 2025/26—and why?
China—and specifically Chinese demand—is likely to be one of the key long-term forces shaping global trade and production. For years, China has been the primary engine of growth in global food trade. But several trends point to slower demand: population is slowly declining; per-capita meat consumption is flattening or slipping; efficiency in the livestock sector is improving—meaning less feed required per head; and the country is investing heavily in domestic production to depend less on imported ag products.
Taken together, Chinese demand seems poised to decline gradually in the mid-term—and it’s not clear which region, if any, can fill that gap.
Without giving away your keynote at Global Grain Geneva, what message do you most want millers and market participants to take away this November?
Don’t be complacent. Today’s prices and volatility do not reflect the real risks in front of us—geopolitics, policy, logistics and tight wheat balances.
*Answers have been lightly edited for length and clarity.
Mr. Andrey Sizov is a leading expert on global grain and oilseed markets with over 25 years of experience in research, consulting, business development, and communications. He is the Managing Director of SovEcon, a consultancy focused on global grain futures, and Managing Editor of The Sizov Report, a widely followed source on Black Sea grain markets. He has also served as a board member and advisor to major farming companies, trading firms, and hedge funds.
Andrey is one of the most quoted experts in global agriculture, regularly featured in the Wall Street Journal, Financial Times, Bloomberg, and Reuters. He is a frequent keynote speaker at major industry events, including the USDA Ag Outlook Forum and Global Grain, and has contributed articles on agriculture and food to Agriculture.com, Financial Times, and Forbes. He holds a degree in Finance and Credit and an Executive MBA from IE Business School.