Global grain markets are entering a new phase marked by easing prices, strong harvests, and shifting trade dynamics, according to the World Bank Group’s latest Commodity Markets Outlook. While the recent decline in food prices may ease cost pressures and improve affordability in many importing countries, the coming challenge will be to maintain profitability and build resilience for producers facing higher input costs and growing climate uncertainty.

The World Bank Group’s latest Commodity Markets Outlook, released on October 29, 2025, forecasts another year of broad-based commodity price declines amid sluggish global growth, geopolitical uncertainty, and strong agricultural supply. The report projects an overall 7% fall in commodity prices in both 2025 and 2026, marking the fourth consecutive year of decline since the 2022 post-pandemic price peak.

The World Bank’s agricultural price index is projected to fall slightly by 2% in 2026 and 1% in 2027, following a period of record highs during 2022–2023. Grain prices—particularly wheat, rice, and maize—continued to edge down for the third consecutive quarter in 2025, driven by ample global supplies and easing trade bottlenecks. The downward trend reflects favorable harvests in key exporting regions, the easing of logistics bottlenecks, and subdued import demand in several developing economies.

Wheat (U.S. HRW) prices are projected to average $249 per metric ton in 2025, before a modest recovery to $258/mt in 2026 and $267/mt in 2027. The report attributes this stability to strong production in North America and the Black Sea region, coupled with reduced speculative activity.

Maize is forecast to average $198/mt in 2025, down slightly from 2024, before stabilizing near $195/mt in 2026. Despite high global inventories, demand for feed and biofuel use remains soft, contributing to price weakness.

Rice (Thailand 5% broken) shows the steepest correction, plunging by 31% to $406/mt in 2025, followed by marginal adjustments in 2026–27. The World Bank cites “a normalization after weather-driven surges and export restrictions in 2024.”

The report concludes that “global food commodity prices have continued to edge down,” with grains acting as the primary driver of this deflationary trend.

SOYBEAN TRADE SPLITS GLOBAL MARKETS

Trade policy frictions are reshaping the soybean market, creating a distinct divide between the U.S. and South American exporters. According to the report, new trade restrictions have curtailed U.S. soybean exports to China, while Argentina and Brazil have rapidly expanded sales, widening the benchmark price gap between Chicago and Brazilian ports.

As a result: Soybean prices are forecast to drop to $405/mt in 2025, with only minor fluctuations expected in 2026–2027. Brazil is expanding soybean acreage, while U.S. producers are expected to reduce planting due to lower export incentives. Soybean oil is forecast to reach $1,158/mt in 2025, up 13% from last year, reflecting higher processing margins and renewable fuel demand. This shift underscores a structural reorientation in global oilseed trade, where Latin America’s role as a primary supplier to Asia is becoming more pronounced.

FERTILIZER COSTS ERODE FARMER PROFITS

The report highlights a concerning divergence: falling grain prices but rising input costs. Fertilizer prices have increased by 19% during the first nine months of 2025, driven by strong demand, export curbs, and elevated energy costs.

Key drivers include:

• China’s restrictions on nitrogen and phosphate fertilizer exports.
• EU tariffs on fertilizers from Russia and Belarus, tightening supply.
• Persistent high urea and DAP prices, with urea averaging $440/mt in 2025.

Although the World Bank projects fertilizer prices to ease by about 5% annually in 2026 and 2027, they will remain far above pre-pandemic averages, keeping farmers’ profit margins under strain. The report warns that this combination may lead producers—especially those in developing regions—to cut fertilizer use in the 2025–26 season, potentially lowering crop yields and creating future supply risks.

CLIMATE AND POLICY RISKS AHEAD

The World Bank lists La Niña-related weather risks as a major upside factor for grain prices in 2026. A stronger-than-expected La Niña could bring hotter and drier conditions to key production zones such as Argentina, southern Brazil, and the U.S. Gulf Coast, undermining maize and soybean output. Meanwhile, flooding in South and East Asia could disrupt rice planting seasons, amplifying volatility in regional grain markets.

Policy uncertainty also remains a risk factor. Rising protectionism and new trade restrictions—particularly among major exporters—could trigger sudden price spikes, the report cautions.

FOOD SECURITY: MARGINAL IMPROVEMENT, STRUCTURAL CHALLENGES

Despite falling grain prices, the number of people facing hunger globally remains alarmingly high—634 million in 2025, down slightly from 673 million in 2024. The World Bank notes that lower global prices have not always translated into cheaper domestic food, as conflicts, currency depreciation, and transport disruptions continue to limit affordability in many developing economies.

POLICY IMPLICATIONS FOR GRAIN-EXPORTING COUNTRIES

For major grain exporters—including the Black Sea region, and Latin America—the World Bank’s findings suggest a complex landscape:

• Lower energy prices may reduce logistics and fertilizer costs, improving competitiveness. But profit margins will remain tight unless productivity gains offset input inflation.
• The shift in trade flows—with Latin America and Russia consolidating dominance in wheat and soy—calls for strategic policy planning in other regions seeking to expand their export share.

KEY TAKEAWAYS FOR THE GRAIN INDUSTRY

• Grain and oilseed prices will remain under mild downward pressure through 2026, supported by strong supply.
• Fertilizer costs will stay elevated, constraining producer profitability and potentially lowering yields.
• Weather volatility (La Niña) and geopolitical risks remain major wildcards for 2026.
• Energy price declines may offer cost relief, but the sector faces long-term structural adjustments.
• Diversification and innovation—rather than direct market intervention—are essential for building resilience in global grain trade.