Speaking at EuroGrainExchange in Bucharest, Peter Clubb, Market Analyst at the International Grains Council (IGC), said global grain markets are entering the new season with comfortable supplies and relatively low prices following record crops in 2025/26. However, he warned that weaker planting incentives, higher fertilizer and diesel costs, possible El Niño-related disruptions, and ongoing tensions around the Persian Gulf are adding fresh uncertainty to the outlook for the next crops.

Global grain markets remain broadly well supplied after a bumper 2025/26 season, but the outlook for the coming crop year is becoming more complicated as weather, input costs and geopolitical risks begin to weigh more heavily on production prospects.

Presenting at EuroGrainExchange in Bucharest, Peter Clubb, Market Analyst at the International Grains Council (IGC), said the market is still benefiting from a record harvest in 2025/26, with aggregate global production of wheat, maize, rice and other grains estimated at a new peak of just under 3 billion tons. Despite continued population growth, production per person has also improved, underlining the strength of recent crops.

DEMAND CONTINUES TO EXPAND

Clubb said global use of grains reached a new high in 2025/26, supported by steady growth in food, feed and industrial demand. Consumption has been driven not only by population growth, but also by rising incomes, particularly in Asia and Africa, where stronger food and feed demand is emerging as diets evolve. Industrial usage remains the smallest part of total demand, but it has been the fastest-growing segment over the past decade, led mainly by grain use in ethanol and other biofuel industries. Even with demand rising, output in 2025/26 exceeded consumption, allowing stocks to recover.

STOCKS REBOUND, BUT RATIOS REMAIN BELOW HISTORICAL HIGHS

According to Clubb, total grains stocks are set to rebound from a multi-year low, reaching a six-year high in 2025/26. However, he stressed that stock-to-use ratios remain below historical highs despite the recent recovery.

For total grains, the stock-to-use ratio is estimated at 26% in 2025/26, compared with 34% for wheat, 24% for maize and 17% for barley. Looking at the broader grains balance, the overall stock-to-use ratio is placed at 28%, with rice at 36%, wheat at 34%, maize at 24% and other grains at 15%.

LOW PRICE ENVIRONMENT CONTINUES

The comfortable supply picture continues to weigh on prices. Clubb said the IGC Grains and Oilseeds Index (GOI) remains below both medium- and long-term averages. The index is about 2% below the 10-year average and 21% below the five-year average, although still 16% above the level seen in December 2019.

WHEAT: PRICES RECOVER, BUT 2026/27 OUTPUT SEEN LOWER

In wheat, ample supplies and strong exporter competition weighed on prices for much of the season. More recently, however, prices have firmed as supplies tightened and currency movements played a larger role than usual in shaping export quotations.

Clubb highlighted diverging FOB price trends among major exporters, with the appreciation or depreciation of local currencies against the US dollar having a significant effect on competitiveness. The weaker Argentine peso supported lower offers for much of the season, while stronger currencies in other origins added some support to prices.

For 2026/27, the IGC forecasts world wheat production at 821 million tons, down 3% year on year, or 23 million tons below the previous season. World harvested area is projected at 219.6 million hectares, down 2.6 million hectares, while average yields are forecast at 3.8 tons per hectare, down 2% from the previous year.

Even with that decline, Clubb said the crop would still remain historically large and comfortably above the five-year average. He also pointed to the prospect of better crops in North Africa following relief from prolonged drought, while Türkiye was also highlighted as a country with potential for a stronger harvest.

MAIZE OUTPUT TO EASE AS COST PRESSURE CURBS PLANTING

Maize is also expected to retreat from the 2025/26 peak, although only modestly. The IGC’s tentative outlook places 2026/27 world maize production at 1,302.8 million tons, down 1.3% from the previous season’s 1,319.6 million tons.

Clubb said the decline is expected to come mainly from a pullback in planted area rather than a major collapse in yields. Low prices are reducing planting incentives, while rising fertilizer costs are becoming a more serious concern for maize than for some competing crops because of maize’s higher nutrient requirements.

Among major exporters, the IGC projects the US crop at 400.2 million tons, down 7.4% year on year, while Brazil is seen at 138.9 million tons, Argentina at 59 million tons, and Ukraine at 31.5 million tons. China is projected to produce 303.7 million tons and the EU 59.0 million tons.

RICE: RECORD OUTPUT POSSIBLE, BUT EXPORT PRESSURE PERSISTS

Rice remains the most constructive part of the supply outlook. Clubb said 2026/27 world rice production is tentatively projected to rise to a fresh record, supported by modest gains in both acreage and yields. Average world yields are forecast at 3.2 tons per hectare, up 0.4% year on year.

At the same time, rice prices have remained under pressure due to strong competition among the key Asian exporters and generally weak demand over recent months. However, he noted that rising transportation, packaging and energy costs in exporting countries have recently provided some support to FOB values.

PERSIAN GULF TENSIONS ADD COST AND FREIGHT UNCERTAINTY

Clubb also examined the implications of the Persian Gulf disruption for freight and grain logistics. His assessment was that the impact on dry bulk freight has so far been relatively limited in structural terms, because the region accounts for only around 6% of global Panamax, Supramax and Handysize trade, and very few Capesize vessels call at the Persian Gulf.

However, the effect on marine fuel has been much more pronounced. Bunker prices surged at the outbreak of the conflict and, despite retreating from their initial peaks, remained more than 40% higher than before the escalation.

That has increased uncertainty for freight costs and trade execution. Clubb said the initial concern over bunker availability prompted a rise in vessel fixing in Asia, while later volatility weighed on activity. More recently, solid minerals and grains demand has helped support dry bulk time-charter rates. He added that there had also been some dislocation in container markets, particularly in the Near East, although the greatest turbulence had been seen in tanker markets.

EL NIÑO AND FERTILIZER ARE THE KEY RED FLAGS

Among the most important risks for the next crops, Clubb highlighted the possibility of a significant El Niño event in the second half of 2026. Early indications suggest that such a development could disrupt weather patterns across Asia and South America, with implications for rice crops in Asia and winter grains and oilseeds in Australia.

In parallel, tighter fertilizer availability and elevated prices are emerging as another major concern. This matters especially because today’s high fertilizer costs are occurring in a low grain-price environment, reducing farmers’ ability or willingness to maintain application rates.

Clubb said the Northern Hemisphere crop may be relatively protected in the near term because many farmers are already supplied, but if the disruption persists, Southern Hemisphere production and later cropping decisions could come under greater pressure.