The global wheat market may be weighed down by abundant supplies, but conditions could still change quickly if key risks emerge in the months ahead, says an international ag economist.
In a commentary Tuesday, Dennis Voznesenski of The Commonwealth Bank of Australia (CommBank), said a few risks on the horizon could change the picture for wheat in 2026.
As part of his analysis, Voznesenski said that despite weak prices, export data are showing encouraging signs. Buying interest from Asia and the Middle East has improved, and major exporters are moving large volumes of grain. Canadian, U.S., Russian, and Ukrainian wheat exports have all been running strong, suggesting demand is quietly doing its job behind the scenes.
“When you look at Canadian, US, Russian and Ukrainian exports, they’ve all been quite strong, meaning someone’s buying this wheat,” he said.
For now, however, the scale of global production is overwhelming those demand gains. Large harvests across several exporting regions have kept a lid on prices, preventing rallies from taking hold.
“Yes, demand is picking up. That’s a positive as always, but there’s just simply too much wheat around,” Voznesenski said.
Looking ahead to the New Year, he noted two key risks that could jolt the market out of its current malaise.
The first is rising tension in the Black Sea region. Shipping disruptions have re-emerged, with attacks on cargo vessels driving up war-risk insurance premiums. Any sustained escalation could restrict flows from one of the world’s most important export corridors.
“If those tensions keep rising, that could cause prices to go higher,” Voznesenski said, adding that a broader escalation in the Russia-Ukraine conflict would almost certainly shift market sentiment.
The second wildcard is spring weather across the Northern Hemisphere. Wheat crops in Europe, the US, Russia and Ukraine will emerge from dormancy in March and April.
“If it is very dry when the crops come out of the ground, that could cause notably higher prices,” Voznesenski said.
Adding another layer of complexity, major importers such as Egypt are signalling plans to expand domestic wheat production, highlighting a growing focus on food self-sufficiency that could reshape trade flows over time, Voznesenski said.
