Global macro-economic woes stemming from the US are rippling through grain and oilseed markets. And this is on top of anticipated robust crops from the EU, Black Sea and North America.

RaboResearch grains and oilseeds analyst Vitor Pistoia said wheat markets have been grappling with weak demand since 2024, with little sign of recovery heading into 2025. “China, for instance, has harvested an above-average wheat crop and may only be an active buyer for high-protein wheat grades,” he said.

Mr Pistoia said, further, April’s USDA World Agricultural Supply and Demand Estimates (WASDE) report added to the bearish tone, raising global wheat stocks by 1.5 million tonnes as export momentum slows. “As a result, wheat prices on CBOT and MATIF markets have declined, with CBOT’s average price falling from AUD 337/tonne in February to AUD 314/tonne in April,” he said.

“Crop conditions in the northern hemisphere are mostly stable, with the growing season expected to have slightly above-average temperatures and average rainfall.

“Russian and US wheat areas are mostly in good shape after much-needed rainfall, while Ukraine’s paddocks lack adequate soil moisture,” Mr Pistoia said.

The Rabobank analyst said the EU is “a bit of mixed bag”, but a crop of around 125 million tonnes is anticipated, which is aligned with its recent years’ production.

“Lastly, Canada’s Agriculture and Agri Food bureau is expecting a slight increase (of 2.5%) in the country’s wheat area and growing conditions have been mixed so far, with more rain needed for optimal yields,” he said.

Across the northern hemisphere, the cropping season remains highly dynamic with some regions nearing flowering and others still seeding.

Looking ahead, Mr Pistoia said the USDA’s next WASDE report on May 12 might be a watershed moment for markets. “This will be the first report with 2025/26 crop forecasts, and cuts in Ukraine’s production are expected. On the other hand, ceasefire talks between Russia and Ukraine could reduce the war price premium on markets, potentially buffering supply-cut tailwinds.”

He said in trade policy, the US has temporarily lowered import tariffs for most countries, offering short-term relief to financial markets. “However, this pause is set to expire in early July, and more trade barriers – both tariff and non-tariff – are expected, adding further uncertainty to global markets, including currency.”

Mr Pistoia said, “down under”, the 2025/26 wheat crop may see an area reduction following soft prices and potential higher margins for other crops. Barley and pulses are likely to gain ground, while for higher rainfall zones, canola is usually the “chosen one”, he said.

On the export front, he said, volumes are falling behind the pace necessary to avoid a 2024/25 carryover into the 2025/26 crop. “This could weigh on Australia’s wheat prices, making them softer relative to CBOT and MATIF benchmarks. A lot can happen impacting Australia’s wheat price relative to global references, but the pendulum for 2025/26 is leaning towards strong correlation.”

Mr Pistoia said as of early May, the expectation is for a national wheat crop between 30 million to 33 million tonnes, almost on par with the past five-year average of 33.8 million tonnes.

“In such a scenario, there are not many happy stories to tell. At least for now,” he said.

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Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 125 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 38 countries, servicing the needs of more than nine million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 87 branches throughout Australia and New Zealand.