Australia Grain Outlook 2025/26: Wheat and Sorghum Rebound, Rice Plunges on Water Shortage

Australia Grain Outlook 2025/26: Wheat and Sorghum Rebound, Rice Plunges on Water Shortage

📍 Executive Summary

• Following a dry autumn, widespread July rains improved winter crop conditions.
• Wheat and barley production forecasts remain above the 10-year average.
• Sorghum continues its upward trend, with exports to China leading demand.
• Rice faces a 33% production drop due to low irrigation storage, cutting exports sharply.

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🌾 1. Wheat Market Overview

Indicator	2024/25	2025/26 (f)
Production	34.1 MMT	31.0 MMT
Exports	23.0 MMT	25.0 MMT ↑
Domestic Consumption	8.0 MMT	8.1 MMT ↑
Ending Stocks	6.25 MMT	4.38 MMT ↓
Yield	2.61 t/ha	2.48 t/ha ↓

• Rainfall in July turned around a difficult start for southern states.
• Despite reduced planted area, higher carry-in stocks support exports.
• Feed demand is rising, led by expanding beef feedlot operations.

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🍺 2. Barley Market Overview

Indicator	2024/25	2025/26 (f)
Production	13.3 MMT	13.0 MMT
Exports	7.5 MMT	6.5 MMT ↓
Domestic Use	6.0 MMT	6.1 MMT ↑
Ending Stocks	0.88 MMT	1.28 MMT ↑

• Area expanded to 4.8 million ha as growers switched from wheat during dry seeding conditions.
• Export dip reflects high 2024 shipments, reducing stock for 2025.
• China accounts for ~75% of exports post-tariff removal.

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🌽 3. Sorghum Market Overview

Indicator	2024/25	2025/26 (f)
Production	2.33 MMT	2.50 MMT ↑
Exports	2.30 MMT	2.40 MMT ↑
Domestic Use	60,000 MT	60,000 MT
Ending Stocks	0.10 MMT	0.14 MMT

• Planted area rising to 670,000 ha due to high demand from China (90% of exports).
• U.S. sorghum faces 22% Chinese tariffs, boosting Australia’s competitiveness.
• Yields projected slightly lower (3.73 t/ha) but still 17% above 10-year avg.

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🍚 4. Rice Market Collapse (Irrigation-Driven)

Indicator	2024/25	2025/26 (f)
Production (milled)	343,000 MT	230,000 MT ↓33%
Exports	230,000 MT	170,000 MT ↓26%
Imports	260,000 MT	270,000 MT ↑
Domestic Use	410,000 MT	420,000 MT ↑

• Low dam levels and competition from cotton drastically reduce the planted area.
• Industry pivoting away from high-volume targets; peak now capped at ~500,000 MT.
• Imports from Thailand, India, and Vietnam cover broad grain types unavailable domestically.

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📈 Export Outlook: China Drives Demand, Risks Remain

• Wheat: Slow MY 2024/25 exports led to stock buildup. MY 2025/26 boosted by carry-in.
• Barley: After record shipments, limited supply caps 2025 exports.
• Sorghum: Trade with China is strong, but the market is near full capacity.
• Rice: Export potential shrinks; import reliance rising.

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🌦 Weather Outlook

• Above-median rainfall forecast through October 2025.
• Critical for the southern regions’ yield realisation, particularly for wheat and barley.
• Soil moisture maps show improvement, but Western Australia remains dry.

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🧭 Conclusion

Australia’s grain sector remains resilient and export-driven, with strong potential in wheat and sorghum. However, water availability and input competition are shifting rice and crop strategies long term. China continues to play a decisive role in shaping grain flows.

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