The latest insights and information on the Australian and global cropping markets as of August 2026*
Global conflicts and northern hemisphere production issues shape grain markets
Grain market dynamics have reverted since the commencement of hostilities in the Middle East. Global grain balance sheet projections began to tighten, as growers reacted to higher input costs, tighter margins and increased risk by shifting plantings away from corn and cereals to higher value, lower input crops such as oilseeds and pulses.
Tighter supply forecasts were exacerbated by a widespread drought in US hard red winter wheat growing areas, and late season heatwave conditions across Europe that have trimmed winter crops and sent summer crop yields backward. The US wheat crop is expected to be the lowest since 1971. In Europe, while the heat was too late to significantly impact winter crop yields, but corn and spring barley production are likely to be significantly reduced by up to 30 per cent.
A common theme has emerged among many major grain exporters in 2026/27: shrinking grain acreage, particularly for wheat. In the US, farmers planted the smallest wheat area since records began in 1919.
Similar trends are emerging elsewhere. Top exporter Russia could harvest its smallest wheat area in more than a decade as sunflower seed and rapeseed plantings climb to record highs. Canada planted a record canola area in 2026/27, while wheat acreage fell to a four-year low, and the European Union also shifted land from grains into oilseeds. In Australia, 2026/27 wheat area is predicted to fall to a seven-year low following adverse planting conditions in the northern half of the east coast.
As a result, the United States Department of Agriculture (USDA) recently projected that global wheat production in major exporting countries would fall by 31 million tonnes (mt) or around 10 per cent this year, with US -12mt, European Union -9mt, Canada -6mt, Australia -6mt and Argentina -7mt.
This chart shows wheat production estimates in major exporting countries. Source: USDA.
With lower production in key exporting countries, importers will be more reliant on supplies from the Black Sea (Russia and Ukraine) with projections that this region may need to supply 35 per cent of all global wheat exports.
Given the increased importance of Black Sea exports, global wheat prices have been sensitive to news of recent attacks on key grain infrastructure throughout the Black Sea, signalling that Ukraine and Russia have abandoned a deal to allow Black Sea grain shipments.
This chart shows 26/27 total global wheat export projections and Black Sea share. Source: USDA.
Ukraine has lost about a third of its capacity to export grain via its vital Black Sea ports, while it has been attacking Russian vessels in the Sea of Azov (key route for about 25 per cent of exports). Markets are fearing strikes will spread to critical Russian ports, like Novorossiysk, the top outlet for Russian wheat exports.
Global importers had been anticipating abundant supply of Black Sea wheat but now may have to turn to more expensive supplies out of western Europe, Australia and North America. Global grain values have rallied to their highest level since April 2025. Due to rising freight costs and problems with Black Sea wheat finding a path to market, Asian importers are likely to turn to Australia where there are relatively abundant wheat stocks.
About the only negative is subdued export demand from Middle East and North Africa (MENA) with major buyers including Egypt and Türkiye, currently harvesting larger grain crops. USDA currently estimates that 26/27 MENA production will rise from 37 million tonnes to 46 million tonnes reducing import requirements by 8 million tonnes to 50 million tonnes.
A tighter global grain balance sheet and emerging problems with European supplies will place greater emphasis on the size of the US corn crop. Recently, the USDA lowered US corn carry-in stocks due to strong demand and has estimated that US corn plantings declined by around 3 per cent, meaning anything less than trendline US corn yields will create further supply pressure.
This chart shows US and French wheat prices. Source: LSEG Workstation.
Tighter US corn stocks will be supportive of global coarse grain values and international feed barley prices. Strong Chinese demand has virtually exhausted Australian barley export supplies and China has turned to new crop European supplies with ports busy loading out French barley for China in the past month.
Increased demand from the biofuel sector due to rising mandates and the increased price competitiveness of biofuels due to higher oil prices will likely keep the global grains balance sheet taunt throughout the coming year.
Oilseeds values have been volatile moving up and down with crude oil values that have gyrated with sentiment regarding peace prospects in the Middle East. The global oilseed balance sheet looks to be finely balanced with increased production in Canada, helping to offset lower crops elsewhere as yields revert to trendline. However, higher crude oil prices and an expansion in canola crushing capacity, particularly in Canada, continue to stoke demand for oilseeds for biodiesel. The reemergence of China as a significant importer should underpin canola demand in the coming year.
Global pulse markets have been relatively quiet with the sub-continent chewing through a larger crop and high stock levels, with traders keeping a close eye on monsoon rainfall levels and Australian new crop production prospects. There has been a moderate increase in buying activity for chickpeas related to concerns over Australia’s new crop production levels which are anticipated to fall to around half last year’s levels.
Improved export prospects and slow grower selling supports local wheat prices
Strengthening global prices and grower concerns about new crop production prospects have slowed local grower selling which has seen prices strengthen, particularly in the northern regions.
Local wheat bids have jumped $20 to $40/t higher in the past month with a combination of factors coming together to strengthen the market.
First, the weather forecast is ominously devoid of any hint of rain and crops need a drink, particularly in the northern zone. This is encouraging local growers that are still holding old crop stocks to hang back from selling volume and aim for higher price points.
As recently a fortnight ago this wasn’t really bothering the trade because they could pick up wheat from central and southern NSW and use cheap freight to truck it north. However international price movements have strengthened southern bids and this, combined with increasing diesel/freight costs has increased the cost of moving this grain north.
In the south and west where crop prospects are better prices rose by about $20/t, following international markets higher but unlike the northern zone there is no domestic market premium. The best action has been in WA where prices have bounced to 18-month highs on the prospect of Asian demand for old crop.
Growers are reluctant to commit to new crop sales at prices that are showing a small premium. Northern growers are worried about El Nino forecasts and needing more rain to get the crop home, while those in the south are worried about heightened frost risk on advanced crops.
Australia exported 2,086,312 tonnes of wheat in May, up 46 percent from the 1,431,658t shipped in April, with the largest markets being the Philippines on 463,897t, Indonesia on 416,321t, and Yemen on 316,423t. Competition from northern hemisphere exporters eased ahead of their new crop harvest.
This chart shows wheat values at major Australian ports. Source: CGX.
Solid export and domestic barley demand drive prices to evens with wheat
Australia exported 826,954 tonnes of barley in May with China, the main destination, taking 660,000 tonnes. Current season exports continue to exceed expectations, and despite domestic use falling away with improved pasture conditions across south-eastern Australia, old season stocks will virtually be exhausted by season’s end.
China remains the key driver with imports forecast around 12.95 million tonnes this year.
The local barley market has risen by a similar amount to wheat over the past fortnight and is also now bid $410/tonne delivered Downs. There is a lower level of demand for feeding as previous but there are enough smaller operators, on farm feedlots and farmers supplementary feeding livestock to keep the market supported, and often trading a slight premium to wheat, given tight stocks and slow grower selling.
This chart shows the value of barley at ports in WA and NSW. Source: CGX
In the south and west, increased plantings and strong yield potential is keeping barley price prospects subdued. With old crop stocks virtually exhausted, export business will be quiet ahead of new crop. Selling activity should pick up as new crop prospects firm, particularly if China looks to Australia for supply if problems persist with the availability of Black Sea grain.
Higher input prices and dry conditions in the north to lower Australian plantings
In its June crop report, the Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) forecast Australian winter crop production to decrease by 21 per cent to 54.5 million tonnes in 2026–27. This is 12 per cent below the 5-year average but 4 per cent above the 10-year average to 2025–26, reflecting lower expected average yields and a fall in area planted.
Despite a significant increase in both fuel and fertiliser prices, a favourable start to the season has incentivised a close to average winter crop area to be planted in Western Australia, South Australia, Victoria and parts of southern New South Wales, albeit with some notable changes in crop mix. Dry conditions are expected to result in a significant fall in the area planted to winter crops in 2026–27 through northern New South Wales and southern Queensland.
Area planted to winter crops in Australia is forecast to decline by 7 per cent in 2026–27 to 23.6 million hectares, 3 per cent below the 5-year average but 3 per cent above the 10-year average to 2025–26. A forecast increase in area planted in Victoria and South Australia is likely to be more than offset by falls in Queensland and New South Wales, while area in Western Australia is largely unchanged.
Area planted to wheat is forecast to fall by 12 per cent to 10.9 million hectares, the smallest area planted since 2019–20 reflecting the diminishing margins for wheat compared to other crops and dry conditions in northern cropping regions.
Barley plantings are forecast to increase by 4 per cent to 5 million hectares in 2026–27 reflecting strong barley prices and its comparatively lower fertiliser requirement compared to wheat and canola.
Area planted to canola is forecast to fall by 6 per cent to 3.5 million hectares in 2026–27, with small increases in Western Australia, Victoria and South Australia more than offset by a significant decrease in the area planted in New South Wales.
Area planted to winter pulses is forecast to decrease by 7 per cent to 3.2 million hectares in 2026–27, driven by lower chickpea plantings. Area planted to chickpeas is forecast to fall by 3 per cent to 732,000 hectares, reflecting very poor planting conditions in major chickpea growing regions of northern New South Wales and southern Queensland. Area planted to lentils and lupins is forecast to increase in 2026–27, up by 2 per cent and 23 per cent respectively, reflecting increased demand for livestock feed and lower fertiliser requirement compared to other winter crops.
Southern Queensland prepares for a big sorghum plant if it rains
The sorghum market remains very thinly traded in the Downs and Brisbane market zones. The container trade is quiet with indicative values of around $350 to $360/tonne Downs. There are no bulk vessels on the Brisbane stem for the next few months.
Traders have been accumulating sorghum into Gladstone port at values of around $360/tonne.
As export demand slows out of Brisbane/Newcastle, at a $40/t discount to white grains sorghum is starting to work into feed rations. Growers in these zones might find a bid around $380/tonne for Brisbane but for delivery months after October.
In terms of export activity for May, China at 404,938t was the destination for 99 per cent of Australia’s sorghum exports, with Taiwan on 3736t and The Philippines on 1724t a long way behind for second and third.
Southern Queensland growers with fallow country and significant subsoil moisture are expected to start planting sorghum from next month if they get rain to wet the topsoil.
Canola tossed around at higher values by crude oil uncertainty
Despite a forecast rise in global canola production by around 2 million tonnes to 97 million tonnes and higher carry-in stocks from last season, canola stocks are expected to remain largely steady due to a 4 million tonne rise in consumption to 96.5 million tonnes.
Prospects for another record canola crop in Canada will more than offset the prospect of a fall in Australian production with crops remaining roughly steady across all other major producers.
The relaxation of Chinese export restrictions on Canadian and Australian canola and the issuance of import licenses to private crushers should facilitate an expansion in canola consumption provided canola remains competitive vis-à-vis soybean and palm oil.
In Canada, domestic crushing activity continues to expand supported by biofuel incentives and clean fuel regulations. Recently Cargill announced its canola processing plant in Regina, Saskatchewan is up and running and is expected to process up to 1 million tonnes of canola annually. Canadian canola crush capacity stood at 13.46 million tonnes at the end of 2024 and was expected to rise to 14.46 million with completion of the Cargill plant - a 28 per cent increase in national capacity since 2021. Louis Dreyfus has expanded its plant in Yorkton to more than two million tonnes annually and Richardson International also doubled the size of its Yorkton crush plant with hopes that Canadian crushing capacity would rise to above 15 million tonnes by the end of the year.
With exports running at near 9 million tonnes for the year so far, canola availability in Canada has tightened encouraging crusher to offer stringer domestic prices to ration supplies. Strength in Canadian canola values should support Australian prices through the year. The narrowing of the GM vs non-GM spread indicates strong demand from China and the biofuel sector.
This chart shows the value of GM and non-GM canola at WA ports. Source: CGX.
Pulse trade remains quiet as sub-continent buyers assess northern hemisphere crops
The global pulse market remains broadly stable as favourable crop prospects in Canada, comfortable stocks in India, and ample export supplies from Australia continue to balance the market with limited upside for prices in the near term as buyers have access to multiple competitive origins.
India’s rainfall deficit has narrowed to 16 per cent from nearly 40 per cent at the end of June, following widespread rains over the past few weeks, although some regions are still facing rainfall deficits of as much as 40 per cent. The strength of the Indian monsoon affects demand for Australian chickpeas and lentils.
In Canada, pulse crops are developing under favourable weather conditions following adequate rainfall and growing season temperatures. If current conditions persist, Canada is expected to maintain a sizeable export surplus in the 2026/27 season.
India remains well supplied thanks to higher domestic production and earlier imports. Processors are purchasing mainly to cover immediate needs rather than committing to large forward contracts while monitoring crop developments in Canada.
Large pulse carryover stocks in Australia adds to strong competition among major exporters and strengthens the bargaining position of major importing countries.
Concerns over new crop chickpea production in Australia (which is expected to fall by around 50 per cent) has led to some renewed buying demand from India and Pakistan which has pushed bids back to $750/tonne Brisbane and $720/tonnes Downs container packers, up around $50/tonne over the past month.
On faba beans, Egyptian buyers are waiting to see if heatwave conditions have affected the quality of European beans. If quality is reasonable and buyers can extend coverage cheaply, export demand for Australian beans will remain subdued until later in the year. Currently export bids are around $400/tonne against offers in the mid $400/tonne with stockfeed demand weak given strong pasture conditions.
Current-crop lentils have traded sideways in the past month at around $630/tonne port, while the new-crop market is developing around a $600/t, pressured by large availability of old crop Canadian lentils and strong new crop prospects in both Canada and Australia.
Growers of all three major pulses in Australia are yet to engage in new-crop trading, with depressed prices the reason on faba beans and lentils, and uncertainty about yields deterring forward sales of chickpeas.
This table shows grower trade bids for grain in major Australian grain markets. Source: Clear Grain Exchange.
The information contained in this article is given for the purpose of providing general information only, and while Elders has exercised reasonable care, skill and diligence in its preparation, many factors (including environmental and seasonal) can impact its accuracy and currency. Accordingly, the information should not be relied upon under any circumstances and Elders assumes no liability for any loss consequently suffered. If you would like to speak to someone for tailored advice relating to any of the matters referred to in this article, please contact Elders.