Geopolitical tensions and concerns about the impact of tariffs and trade frictions not with standing, there are several factors that give cause for optimism for Australia’s grains and oilseeds sector when it comes to global markets in the year ahead.

For global prices, there are some signs of positivity on the horizon. Falling global stock levels should support wheat prices in 2025 and CBOT wheat has already moved higher this year. In addition, Russia, the world’s largest wheat exporter, is unlikely to maintain the very big export volumes seen over the past two seasons. And global canola stocks are also under pressure, although improving availability of soybeans is increasing competition within the vegetable oil sector, likely preventing significant price rises.​

The world’s wheat and barley supply is expected to be even more dependent on weather in 2025 than in recent seasons. This is due to challenging farming budgets worldwide, driven by persistently high farm input prices and depressed grain prices, which could ultimately reduce cropping area and hamper yield potential. At the same time, excluding China, the global stock-to-use ratio of wheat is dropping for the seventh consecutive season, despite above-average crops in Australia and Russia in recent years.

With these margin structures during the northern hemisphere planting season, it is understandable growers may partially remove wheat and barley from their programs and replace them with pulses and oilseeds. ​

Additionally, the evolving situation in Russia warrants attention. Due to its significant production and export growth in recent years, Russia has become a key market reference. However, its role may change in 2025/26. With Russian interest rates above 20%, strict export quotas and ongoing geopolitical tensions due to the war with Ukraine, Russia might not be able to export as much wheat in 2025 as in previous years. ​

For canola, globally the 2025/26 season begins looking very similar to 2024/25, with tight EU stocks, sub-optimal crop ratings in Europe (albeit a slightly bigger planted area), large soybean crops underway in South America, an expected rise in palm oil prices and concerns about how US tariffs and potential retaliations from China will influence the market.

The overall balance between supply and demand for global oilseeds hasn’t changed much compared with the previous season. However, the focus has shifted to potential tariffs affecting soybean trade between the US and China. A disruption in trade between these two countries is expected to lower global soybean prices, making them more competitive compared with other oilseeds.

Another consideration is the new US president’s support of fossil fuels, although in the US many decisions related to energy production are made at state rather than federal level.

Additionally, Canadian canola exports are closely tied to overall Chinese and US demand for vegetable oil. In recent years, more than 80% of Canada’s canola oil exports went to the US. If that demand decreases, Canada may need to export more to other countries.​

Globally, farm input prices – for fertilisers and plant protection products – are forecast to remain stable or increase slightly. In Australian dollar terms, global urea and phosphate prices have moved upward from their Q2 2024 lows. As Australia imports most of its fertilisers, the weaker Australian dollar makes those imports more expensive. Looking ahead, we don’t expect very significant fertiliser price swings, although we do see more upside than downside price risk.

Global Perspective
Stefan Vogel, Rabobank