Weather extremes, shifting trade routes, and geopolitical tensions are reshaping wheat production and export dynamics ahead of the 2025/26 season, as experts warn of tighter margins and rising uncertainty.

At the 2025 International Grains Council (IGC) Conference in London, the wheat-focused panel titled “Wheat Workshop: Production Outlook and Market Prospects in 2025/26,” chaired by Alexander Karavaytsev, Senior Economist at IGC, brought together market experts and regional analysts to evaluate the prospects for global wheat supply, demand, and trade flows in the upcoming season.

Weather: A Mixed Global Picture

Isabelle Tranter, Meteorologist at Aura Commodities, offered a climatological overview of the season, noting improved growing conditions across much of Europe, southern Russia, and Ukraine compared to the drought-ravaged year prior. Russia’s wheat output is projected to rise modestly to around 82 million tonnes, while Ukraine’s production may decline slightly due to uneven weather, keeping the region’s total wheat output close to last year’s level.

In the U.S., Tranter reported better-than-expected winter wheat conditions, with yields likely to increase. However, excessive rainfall in Texas raises concerns over quality—particularly protein content—rather than quantity. Meanwhile, spring wheat areas in the Northern Plains and Canadian Prairies face renewed dryness, with potential yield risk if high-pressure patterns persist through the summer.

China, which has relied largely on domestic production in recent years, may experience a setback. Tranter warned of potential losses in key provinces like Henan due to prolonged heat and drought. “We estimate China’s wheat production at around 138 million tonnes, approximately 4 million tonnes lower than USDA’s current forecast,” she said—raising the possibility of increased Chinese imports later in the season.

Supply Concentration and Geopolitical Disruption

Petar Dimitrov, CEO of Agricore Bulgaria, highlighted the strategic weight of the Black Sea in global wheat trade. “The region now accounts for roughly 40% of global wheat exports,” he noted, citing combined output from Russia, Ukraina, Romania and Bulgaria. Despite limited room for further expansion in acreage or yields, Dimitrov described the Balkans—particularly Romania and Bulgaria—as a “boutique shop” for wheat, serving diverse protein needs from 11.5% to 14.5% across Europe, Asia, and North Africa. However, margins are tightening. “Producers are increasingly considering alternative crops like pulses and oilseeds due to profitability concerns,” he added.

Shifting Competitiveness and Trade Patterns

Ishan Bhanu, Lead Agricultural Commodities Analyst at Kpler, emphasized evolving trade dynamics. While Western European exporters continue to supply African and Middle Eastern markets, Black Sea origins have gained ground in Southeast Asia. Geopolitical developments—especially Red Sea security and the ongoing volatility in Black Sea —could reshape trade flows. “If access through the Bosphorus becomes more stable and predictable, it could level the playing field between Western and Black Sea exporters,” he observed.

Bhanu also flagged that wheat markets are increasingly spot-driven, with limited forward pricing visibility, particularly out of Russia, where uncertainty around export duties and currency volatility discourages long-term contracts. “This market dysfunction intensifies harvest pressure and compresses marketing windows,” he warned.

Outlook from Key Exporters

Carlos Mera, Head of Agri Commodities Market Research at Rabobank, said Australia, Canada, and the U.S. are well-positioned to maintain strong export volumes in 2025/26, albeit with potential downside risks. Canada’s spring planting is progressing well but may be threatened by moisture deficits, while Australia’s production is capped at around 30 million tonnes due to dry conditions.

Argentina presents a more uncertain picture. “Excessive rainfall has flooded parts of the Pampas region, delaying sowing. We’ve had to revise our outlook from bullish to neutral,” Mera said.

Mera added that China’s wheat demand—especially for premium-quality imports—remains a key swing factor, alongside Iran and Brazil. “These are the surprise players to watch on the demand side,” he said.

India: A Critical but Unpredictable Actor

Deepak Pareek, Managing Director and Chief Agricultural Economist at HnyB Tech, clarified the situation in India, a major player with outsized influence on market sentiment. “India’s actual wheat production are likely closer to 96–98 million tonnes, far below official projections,” he said, citing heat stress in key producing states and reduced buffer stocks.

While speculation about Indian imports has frequently stirred global prices, Pareek ruled out imminent action. “The government may consider modest imports, but large-scale buying is unlikely in the near term,” he said. At the same time, India’s massive public distribution scheme—providing free food grains to 800 million citizens—keeps domestic consumption resilient.

Risk Factors and Market Sentiment

Panelists offered divergent views on price direction. Bhanu leaned mildly bullish, citing resilient demand and limited production upside. Mera remained cautiously bearish, pointing to ample global stocks and persistent Black Sea export pressure. Tranter emphasized the risk of weather disruptions, especially in Canada and China.

Dimitrov concluded by emphasizing the market's evolution toward greater discipline: “We are moving from a period strong margins to a phase where efficiency, cost control, and strategic planning will be decisive. The era of easy profits is over.”