International Grains Council (IGC) Senior Economist Alexander Karavaytsev told delegates at the TUSAF Congress that world grain output is set to post a third consecutive record, with a 130 million tonne year-on-year increase—the largest in 12 years—pushing the market back into surplus and lifting global stocks to their highest level in six years. But he cautioned that stock-to-use ratios remain relatively tight at about 34% for wheat and 24% for maize, leaving markets vulnerable to weather and logistics shocks.

Alexander Karavaytsev
International Grains Council (IGC)
Senior Economist

Global grain markets have swung from three years of deficits to surplus this season as record harvests rebuild availability, but the supply cushion is not as comfortable as headline production numbers suggest, International Grains Council (IGC) senior economist Alexander Karavaytsev said at TUSAF’s 20th International Congress and Exhibition in Antalya.

Speaking during the “The Search for a New Balance in Global Grain Markets” session, Karavaytsev said global grain production is set to “smash” previous records for a third straight year, with output rising about 6% year-on-year—an increase of roughly 130 million tonnes, the biggest annual gain in 12 years. He compared the incremental volume to “adding another Russia” to global grain supply.

RECORD WHEAT AND MAIZE CROPS, SURPLUS RETURNS

Based on IGC projections released in January, Karavaytsev put this season’s global maize crop at around 1.3 billion tonnes and global wheat production at around 850 million tonnes, both record levels, with multi-year highs also expected in barley and sorghum.

With consumption forecast to fall short of production for the first time in four years, he said the market is shifting back into surplus after three consecutive deficit years—lifting global ending stocks to the highest in six years and “close to pre-pandemic” levels in absolute terms.

A defining feature of this year’s wheat balance is that much of the production increase is concentrated among major exporting origins. Karavaytsev highlighted a sharp rise in Argentina, alongside a rebound in the European Union and a record crop in Canada. He also flagged that Argentina’s higher yields have generally come with lower protein, describing a trade-off that is shaping the season’s quality mix

WHEAT STOCKS-TO-USE AT 34%, MAIZE AT 24%

Karavaytsev cautioned that the stock build looks less bearish when measured against consumption. He put the global wheat stocks-to-use ratio at about 34%—roughly “four months of consumption”—and the maize ratio at around 24%, adding that stocks-to-use has been trending lower for years, especially in maize, because consumption had been mostly outpacing production until this season’s unusual surplus.

WHEAT DEMAND CONSTRAINTS

While ample supply is expected to push wheat consumption to record levels in both food and feed, Karavaytsev underlined several constraints:

• Rice competition: rice prices have fallen sharply after earlier spikes linked to India’s export restrictions, and the decline has been faster than wheat—potentially encouraging some switching back from wheat to rice in parts of Sub-Saharan Africa and Asia.
• Sub-Saharan Africa white maize rebound: last season’s weak white maize crop boosted wheat imports; a better white maize crop this season could slow the pace of wheat demand growth (even if the long-term trend remains upward).
• Feed competition: a large maize harvest makes maize highly competitive against wheat in many regions; Karavaytsev said Europe stands out as the main region where feed wheat use rises notably due to weaker maize output.
• Soybean meal pressure: soybean meal prices fell to very low levels last July (in his remarks, a 15-year low), reinforcing substitution pressure in feed rations.

WHEAT EXPORTERS HOLD THE STOCK BUILD

Karavaytsev said wheat stock accumulation is expected to be concentrated in exporting countries. He projected lower exports from Russia and Ukraine versus last season due to security, logistics and seasonal factors, while exporters outside the Black Sea lift shipments—yet “trade will not be able to absorb all this accumulation.”

He highlighted the Americas as the key zone where the build becomes “particularly heavy,” pointing to a six-year high in U.S. stocks, a 12-year high in Canada, and record stocks in Argentina (around 5 million tonnes).

On quality and milling economics, he said Argentine wheat is largely 10.5–11% protein; with some buyers reportedly blending it with higher-protein wheat from other origins, including the U.S. and Canada, to optimise flour cost structures.

FOB DOWN, FREIGHT UP

Karavaytsev noted that global FOB wheat prices peaked in May 2022 and have since dropped around 50% over four years, reaching a five-year low around October before stabilising. Year on year, average FOB values were only about 4% lower, even with supply pressure. But he emphasised that importers pay C&F, not FOB, and said freight costs were up about 30% year on year, largely offsetting weaker average FOB values in delivered costs.

WHY PRICES HAVE BEEN RESILIENT

Karavaytsev said several factors help explain why wheat prices have not fallen more sharply despite the return of surplus supply. First, he pointed to uncertainty around the 2026/27 outlook. He also highlighted recent concerns over winterkill risk in the U.S., Ukraine and Russia, as well as in parts of the EU, particularly Germany and Poland. In that context, he also flagged that freeze–thaw cycles can create an ice crust in fields, potentially damaging crops.

Beyond weather, Karavaytsev said market structure and selling behaviour also matter—especially in the EU, where farmers have shown reluctance to sell at current prices. He added that a significant share of exporter stocks sits in private hands rather than public inventories, with selling patterns often shaped by psychological factors alongside profitability considerations.

On currencies, Karavaytsev said the U.S. dollar’s weakness—close to four-year lows—has a two-sided impact. For exporters, local currency appreciation can squeeze margins; for importers, it can lift purchasing power. He noted that in some importing countries, FX moves have supported buying capacity, citing Ghana as an example where the currency appreciated strongly against the US dollar alongside rising gold prices.

2026/27 WHEAT OUTLOOK

Looking into 2026/27, Karavaytsev said the IGC does not expect a meaningful increase in global wheat area, meaning any production upside would have to come mainly from yields. He said wheat area in parts of the EU could be flat to slightly higher in some regions as farmers rotate away from maize, but he flagged the opposite direction in two key origins—the U.S. and Russia—where area is seen lower. In the U.S., he noted winter wheat area is set to be the lowest in six years.

Karavaytsev also pointed to India, where government support has encouraged higher planting/production, and said authorities have allowed some exports this season—with scope for additional export permissions if the harvest turns out strong. He reminded delegates that in 2021/22 India released around 10 million tonnes of wheat to global markets, a reminder of how policy can quickly reshape trade flows.

MAIZE: RECORD SUPPLY, U.S.-LED GROWTH

Karavaytsev said global maize production is also set to hit a record, with most of the year-on-year increase driven by the United States and its “close to half-a-billion-tonne” crop. He flagged Ukraine as a key uncertainty on execution rather than headline production, saying the maize harvest there has been delayed by very wet conditions. Some estimates suggest around 1 million tonnes could still be in the field, with collection expected in March if conditions allow—raising questions over timing and potential quality outcomes.

On pricing, Karavaytsev said maize FOB values are around 8% lower year on year, reflecting the weight of record supply expectations on the market.

On the demand side, he said China—after importing 20+ million tonnes in earlier seasons—“virtually withdrew” last year, but is now expected to return to around 5.5 million tonnes this season. He added that part of China’s feedgrain requirement is being met via substitution, notably U.S. sorghum and feed barley from some other origins, which can cap the upside for maize imports.

Export flows, meanwhile, are “dominated by the U.S.” this season, Karavaytsev said, pointing to an export program of about 81 million tonnes. He also warned that Brazil’s rapid expansion in maize-based ethanol could constrain export availability in the medium term, as domestic fuel demand competes more directly with exporters for supply. As a result, he said, global maize trade in the coming months will largely pivot around China’s import strategy, the U.S. export pace, and Brazil’s accelerating maize ethanol.

WHAT THE GRAIN MARKET IS WATCHING

Karavaytsev said several variables could still trigger sharper moves in grain prices over the coming months, even in a season of record supply.

• South America weather: He said the market’s eyes are firmly on Brazil, given its role as a major supplier—especially for maize—and noted there is still a critical weather window of several months ahead.
• Black Sea logistics: Any improvement in logistics out of the Black Sea could add downward pressure on prices, he said.
• Farmer selling: He highlighted that EU farmers have been holding stocks, but as new crop approaches the need to “make room” can increase selling pressure.
• Currency swings: Scenarios such as a stronger Australian dollar, euro or ruble can weaken exporter competitiveness, shifting trade flows and price formation.
• Geopolitics and trade negotiations: He said regional conflicts, Middle East tensions and potential U.S. policy changes can quickly reshape trade routes and buying patterns.