Last month, the S&P GSCI Grains Spot Index – a key global benchmark for investment performance within the grains market – fell to its lowest level in close to five years (since the end of Q3 2020).

Meanwhile, RaboResearch general manager Australia and New Zealand Stefan Vogel said, against a backdrop of bearish crop fundamentals and heightened external risks (such as geopolitical and trade volatility), speculators continue to hold a sizable bearish position across grains markets as a whole.

Mr Vogel said the US Department of Agriculture’s (USDA) most recent monthly WASDE (World Agricultural Supply and Demand Estimates) report also saw estimates of corn-planted area and yield in the United States increase, piling more pressure on wheat markets already contending with northern hemisphere harvest pressures and – outside the US – sluggish exports from many key origins.

“Chicago Board of Trade (CBOT) wheat prices have felt the impacts, with contracts touching new lows in mid-August,” he said.

“The August WASDE report brought few changes to wheat fundamentals but significant ones to the corn balance sheet, as the USDA updated both corn acreage and yield projections,” Mr Vogel said. “US corn yields are set to reach record highs and, with ample and relatively cheap supplies of corn, it is likely to replace some wheat for feed, curbing overall wheat demand.”

So, he said, despite the USDA showing lower global wheat production and ending stocks in its August WASDE report, CBOT wheat prices have been unable to recover.

Mr Vogel said lower wheat production in China, Argentina, and Brazil more than offset increases in Europe.

“While the USDA made no changes to Russian wheat production in August, private forecasters continue to raise their estimates, with figures nearing 86 million metric tonnes (mt) – above the USDA’s estimate of 83.5 million mt. The increase in Russian wheat production is attributed to better yields across different regions.”

Mr Vogel said in Europe, MARS (the EU Commission’s Agricultural Meteorological Institute) updated its yield estimates, which pushed wheat production in the EU to a total of 132 million mt up by one million mt from the previous estimate and well above last year’s drought reduced crop.

“If these production increases in Russia and the EU are confirmed, global wheat production will exceed what is currently anticipated in the global balance sheet by the USDA.”

He said the US remains the cheapest source of wheat in international markets. “Year-to-date US exports are 11% higher compared with the same period last year. In Europe, exports are lagging last year’s pace, with export volumes for marketing year 2025/26 around 2.18 million mt compared with 4.15 million mt in 2024/25.”

Meanwhile, Mr Vogel said, in the Black Sea region, Russia has seen export volumes decline by 40% compared with last year, despite export taxes being set at zero, while Ukrainian exports are 31% below last year’s pace.

“CBOT wheat prices are trying to find a bottom, but harvest pressure – with increases in Russian, EU and Australian wheat production – is more than offsetting export demand. And funds continue to hold net short positions. Moreover, ample corn supplies will continue to weigh on wheat prices.”

Mr Vogel said, meanwhile at home in Australia, recent rains have improved conditions in many regions likely allowing production to narrow in to the five-year average level, which is very strong as the average includes four of Australia’s best production years.

To find out more about RaboResearch, contact your local Rabobank branch on 1300 303 033 or subscribe to RaboResearch Food & Agribusiness Australia & New Zealand on your podcast app.

RaboResearch Disclaimer: Please refer to our Australian RaboResearch disclaimer here

 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.