Miller Magazine Issue 192 - December 2025

MILLER • DECEMBER 2025 110 both importing and exporting countries. On the export side, both Canada and the United States are set to record multi-year highs thanks to expanded acreage and robust yields. As for the main importers, the European Union is posting its highest durum output since 2018/19, supported by increased sowings and record yields. In North Africa, after three consecutive years of severe drought, production is gradually returning toward its long-term average. Taken together, these developments trans- late into a net global recovery in durum availability for the sea- son, with the highest production of the last 9 years. The rice market is following a broadly similar pattern. Global production is expected to come just shy of last year’s record, while India—the world’s largest producer and exporter—is heading toward an all-time high, and China—the second larg- est producer— is also seeing a slight increase in its harvest. Taken together, these developments mean cere- als supply is abundant across the board, posi- tioning this marketing year’s price volatility to depend far more on demand than on pro- duction shocks. Demand, for its part, is also projected at record levels. Cereals consumption has been rising for decades, driven by popu- lation growth and by the expanding use in both feed and energy production (Graph 2). In particular, one factor contributing to rising global demand is the increasing production of ethanol. Both the global production and consump- tion of this biofuel have grown by 22% over the past decade, with the OECD projecting a further 12% increase in the next 10 years (Graph 3). This has increased the demand for corn especially, as it accounts for a significant share of eth- anol production: it represents the main feedstock used in the US, the world’s leading producer, while in Brazil, the world’s second-largest producer, corn-based ethanol is experiencing rapid growth, complementing traditional sugarcane-based production. All major cereals are expected to reach all-time-high con- sumption in 2025/26, yet in some areas sluggish economic growth is hampering demand growth, with China remaining a critical variable: as one of the world’s largest importers of ener- gy, feed, and staple commodities, fluctuations in its economic performance can influence cereals markets both directly and indirectly through freight, energy, and oil channels. Still, much of the volatility observed in recent months has not come from fundamentals but from macroeconomic and geo- political factors. In 2025 the Euro strengthened against the US Dollar despite the interest-rate gap between the FED and the ECB, driven largely by uncertainty around the new US trade war; this stronger euro contributed to easing European import prices for products like The 2025/26 cereals landscape combines abundant supply with historically high de- mand, while the market’s most significant risks stem not from fields but from economics and geopolitics. Understanding this balance will be key to navigating the months ahead. Global cereals markets: Record supply, demand dynamics, and the growing weight of geopolitics The 2025/26 marketing year opens with cereals markets particularly well supplied, as shown in Graph 1. Corn is lead- ing this abundance, with production at an all-time high at the global level: the United States is harvesting a record crop thanks to an 8% expansion in planted area and yields up by 4%, pushing production 9% above the pre- vious maximum. South America is also contributing strongly: Argentina is expanding output on larger acreage, while Brazil, despite expec- tations of yields closer to the average, remains near historically high production levels. Ukraine’s recov- ery in both area and yields after last year’s sharp decline also adds volume, even if output remains 11% be- low pre-war levels. The main exception is the EU, where drought-stricken yields and shrink- ing areas have pushed production down. Wheat supply is similarly ample, with world production also at record levels thanks to increases in most of the main export- ing countries. The EU is seeing a notable recovery, with higher acreage and the best yields since 2015 driving wheat produc- tion toward 142 million tonnes (Mt). Russia is also expect- ed to harvest another large crop, with some local sourc- es placing output as high as 87.5–88 Mt. Australia is rebounding thanks to elevated yields that offset smaller areas, a situation analogous to the one in the US according to the latest data revision. On the oth- er hand, Ukraine’s production remains stable but structurally reduced, with planted area still around 20% below pre-war levels. In particular, a stron- ger supply is also ex- pected for the durum market, thanks to larger production in MARKET ANALYST ARETÉ Carlotta De Pasquale MARKET ANALYSIS MARKET ANALYSIS 111 MILLER • DECEMBER 2025