Global Wheat Surplus Builds as EU and Black Sea Crops Rebound

Global wheat supply is shifting decisively into surplus as the USDA now sees a record 2025/26 crop, led by a sharp recovery in the EU and stronger Russian, Indian, Canadian and Australian output. This heavier balance caps further upside for futures and cash prices, even as firm MENA import demand and ongoing Black Sea risks help prevent a return to past oversupply lows.

The market is transitioning from the tight 2024/25 season into a materially more comfortable 2025/26 environment. The latest USDA forecast lifts global wheat production to 844.15 million tonnes, 44.82 million tonnes above 2023/24, with the European Union alone recovering nearly 20% year on year. At the same time, cash prices in Europe and the Black Sea remain broadly steady, while weather during the coming jointing and heading phases will decide whether the current yield optimism is fully realised. For traders, this means a market biased lower but still supported by structural import needs and logistical risks.

📈 Prices & Futures

Nearby benchmark prices reflect a well-supplied but not collapsing market. On Euronext, May 2026 milling wheat is trading roughly around €200–205/t, with new-crop September near €207/t, signalling a modest contango as the larger 2025/26 harvest approaches. CBOT May 2026 soft red winter wheat has eased this week, with prices slipping by around €6–7/t equivalent as traders digest larger global supply and weaker energy markets.

Physical indications from recent offers show FOB US wheat at about €0.21/kg (≈€210/t), French FOB wheat around €0.29/kg (≈€290/t), and Ukrainian FOB/Odesa wheat near €0.18–0.19/kg (≈€180–190/t), with values broadly unchanged over the past three weeks. This flat cash profile underscores that the bearish shift in fundamentals is already largely priced in, while freight, risk premiums and quality spreads keep notable differentials between origins.

Origin	Specification	Location / Term	Latest cash price (EUR/t)
US (CBOT-linked)	11.5% protein	FOB Washington D.C.	≈210
France	11.0% protein	FOB Paris	≈290
Ukraine	11.0–12.5% protein	FOB Odesa	≈180–190

🌍 Supply & Demand Balance

The 2025/26 global wheat crop of 844.15 million tonnes marks the largest on record and a decisive break from the tighter 2024/25 balance. The centerpiece is the European Union, where production is forecast at 145.11 million tonnes, recovering 19.87% year on year from 121.06 million tonnes and exceeding even the strong 2023/24 crop by nearly 10 million tonnes. This stems from both an increase in harvested area to 23.96 million hectares and a yield rebound to 6.06 t/ha from 5.33 t/ha.

Russia adds further weight on the export side, with total 2025/26 production revised up to 90.3 million tonnes, 8.7 million tonnes above last year’s reduced crop. The upward move is entirely in spring wheat, now seen at 27.3 million tonnes after better area and yield assessments in Siberia and the Urals, while winter wheat stays at 63 million tonnes. Although still just below Russia’s 2023/24 record, this keeps the Black Sea as a major, price-anchoring supplier for milling and feed wheat into MENA and Asian markets.

Other key exporters reinforce this broad-based recovery. India is projected to harvest 117.95 million tonnes (+4.1% year on year), Australia 36 million tonnes (+5.5%), Canada 39.96 million tonnes (+11.2%) and Argentina 27.92 million tonnes (+50.8%) as it rebounds from last season’s weather-hit crop. Kazakhstan is also up modestly to 19.33 million tonnes, shoring up Central Asian and regional import needs. This diversity of origins limits the impact of idiosyncratic shocks in any single producer.

On the demand side, the Middle East and North Africa remain structurally short, and 2025/26 local production setbacks will keep import requirements firm. Syria’s crop is seen collapsing to just 1.15 million tonnes (down nearly 62% year on year), Iraq falls to 4.4 million tonnes (−26.7%), Turkey to 17.5 million tonnes (−7.9%) and Iran to 13.5 million tonnes (−15.6%). These deficits reinforce robust buying from traditional tenderers in North Africa and the Levant, supporting export programmes from the EU, Russia, Ukraine and Australia despite the heavier global balance.

📊 Regional Fundamentals & Trade Flows

Within Europe, the strong 2025/26 EU harvest changes the internal balance and trade dynamics. Higher production reduces the exceptional import pull that supported prices during the weather‑damaged 2024/25 season, especially in France and Germany. At the same time, the upgraded crop improves export availability from France, Germany, Poland and Romania, which now compete more aggressively with Russian and Australian supplies into MENA tenders.

The United Kingdom adds a stable but modest surplus, with production forecast at 11.96 million tonnes versus 11.15 million tonnes last year. Ukraine’s wheat output is projected at 24 million tonnes (+2.6% year on year), strengthening flows through Black Sea export corridors that address the same MENA demand pool. However, higher freight rates on key wheat routes, up by around 10–20% since early February, are raising landed costs and may slightly temper demand for distant origins versus nearby suppliers.

In North America, recent severe weather across parts of the US has introduced some yield uncertainty for winter wheat, with episodes of storms, heavy rain and temperature extremes impacting crop conditions in late March and early April. For now, though, these risks are more than offset by the scale of production growth elsewhere, so they function mainly as a volatility driver rather than a structural tightening factor.

🌦️ Weather Outlook for Key Producers

Over the next 30–90 days, European winter wheat is entering critical jointing and heading stages, where weather will determine whether the current yield forecast of 6.06 t/ha is achieved. Seasonal outlooks point to largely average rainfall for much of the EU through April–June, with some drier risks in parts of Germany and Poland. Such a pattern would broadly support heading, provided late frosts are avoided and any localized dryness does not persist into grain fill.

The main agronomic risks for EU wheat remain excessive rainfall around flowering (raising Fusarium and quality concerns), late cold snaps, and early summer heat or drought during grain filling. Elsewhere, Russian spring wheat regions in Siberia and the Urals will need timely moisture for emergence and tillering, but current upgraded area and yield assessments suggest conditions have been favourable so far. In the US Plains, ongoing moisture variability will stay on traders’ radar given earlier storm disruptions, but global supply cushion means adverse US outcomes would primarily drive regional rather than global dislocation.

📆 Market & Price Outlook

Near term (next 30–90 days), wheat prices are likely to trade sideways to slightly lower as markets digest the record 2025/26 supply outlook and generally constructive crop conditions across the EU, Russia and key exporters. The modest contango on Euronext, with new crop priced only slightly above nearby, signals that much of the bearish production story is already priced in, but that a further incremental softening is possible if weather remains benign.

Over a 6–12 month horizon, the broad-based recovery in EU, Russian, Indian, Canadian and Australian output should continue to exert downward pressure on international benchmarks such as CBOT and Paris milling wheat futures. That said, strong and persistent import demand from MENA, large public stocks in some consuming countries, and ongoing uncertainty about logistics and policy in the Black Sea region are likely to underpin a floor, keeping prices above the depressed levels seen in past surplus cycles. Chinese buying remains an additional wild card: with domestic production around 140.07 million tonnes, shifts in its import programme could swing global trade balances.

💼 Trading & Risk Management Tips

• Producers (EU, Black Sea): Consider layering in new-crop sales on rallies, using the contango structure to hedge 2025/26 production while maintaining some weather risk upside via options rather than heavy flat-price exposure.
• Importers (MENA, Asia): Use current price stability to extend coverage into late 2026, but avoid over‑front‑loading purchases given record global supply; diversify origin mix between EU, Black Sea and Australia to manage logistics and policy risk.
• Traders: Expect range‑bound futures with weather-driven spikes; strategies selling volatility around key USDA and weather updates, hedged with out-of-the-money calls, may be attractive in a fundamentally heavy but headline‑sensitive market.

📉 3‑Day Directional Outlook (EUR Terms)

• Euronext milling wheat (May 2026): Slightly bearish to sideways in a €195–205/t range, with macro and energy price weakness offset by steady export interest.
• CBOT SRW (May 2026, EUR-converted): Mild downside bias after recent declines, but likely to stabilise above key psychological support as end‑user demand scales in on dips.
• Black Sea physical (Ukraine FOB/Odesa): Stable to slightly weaker in the €175–190/t band, as record global supply and firm freight costs weigh on offers, while MENA tenders continue to absorb volume.