The latest insights and information on the Australian and global cropping markets as of October 2026*
Grain market rally fades but fundamental picture strengthens
A positive shift in grain market fundamentals has seen global grain prices rally strongly since March.
The factors below will combine to see global grain carryout stocks decline for the first time in several years:
- failure of the US hard red winter wheat crop
- failure of summer crops across western Europe combined with smaller crops elsewhere (plantings shifting to oilseeds and yields reverting to trend)
- ongoing firm demand.
This chart shows prices for wheat, corn and canola in Australian dollar per tonne on major international futures exchanges. Source: CBOT and Intercontinental Exchange (ICE).
The tightening in global grain supply has been exacerbated by a sharp contraction in export flows out of the Black Sea as Russia and Ukraine target commercial shipping routes. Ongoing diplomatic efforts have yielded limited progress resulting in Russia and Ukraine having to use more complicated and expensive export routes through alternate European ports. This has reduced their export capacity to around 40 per cent of normal, forcing Middle East and North Africa (MENA) importers that have come to rely on this grain to source grain from other higher-cost origins.
Significant MENA importers like Algeria, Pakistan and Saudi have tapped export markets for supply in recent weeks and are paying up to US$70/tonne more for wheat in import tenders than in early July when they had access to cheap Black Sea grain.
Despite the strong fundamental picture, global grain values have pulled back in recent weeks, largely on profit-taking from investment funds which look to be shifting some focus away from commodities to bond markets. Grains are also feeling some selling pressure from the ongoing US harvest which has subdued corn and soybean values.
North American harvest is now in full swing after wet weather slowed progress, particularly across Canada and the US Mid West, raising concerns around crop conditions, grain quality and disease with harvest around one-third complete and about two-weeks behind schedule.
Contributing to some of the weakness in the corn pit was the USDA projecting significantly higher US corn stocks as of 1 September, inferring weaker levels of US corn feeding.
Despite strength in global wheat and corn values, barley values are being affected by weaker Chinese demand as it harvests a large corn crop and endeavours to moves larger domestic supplies flood damaged wheat. In late May, heavy and persistent rains hit China just as farmers were beginning their wheat harvest resulting in up to 10 million tonnes of shot wheat that will be available to feed livestock. A reduction in the Chinese pig herd from ongoing liquidation due to poor margins may also be contributing to reduced Chinese feed grain demand.
Soybeans values were affected by China excluding soybeans from the list of commodities that China agreed to lower tariffs on in the latest round of trade talks between China and the US.
Like in wheat and corn, oilseeds have been supported by smaller global crops as yields revert to trend in Europe and Canada, while higher crude oil prices have seen increased demand for seed from the biofuel industry. Growth in the North American crushing sector and issues with getting exports out of the Black Sea have also contributed to strength across global oilseed markets.
For pulses, concerns about the impact of El Nino on sub-continent production combined with lower production across North America and issues with the availability of pulse supplies out of the Black Sea has Indian authorities considering reducing import tariffs.
Local chickpea prices have climbed strongly in the past few months as Australian crop production prospects fade. Currently, the chickpea crop is anticipated to fall by more than half owing to poor growing season conditions across northern chickpea growing areas.
Looking forward, the market for grains, oilseeds and pulses is well supported with production falling and stocks tightening. Export availability out of the Black Sea is likely to remain constrained at least into our harvest period. With input prices continuing to escalate and profit margins under pressure, it is likely that plantings and yields will continue to ease into the next crop year.
For example, a 20 per cent fall in Brazil’s Nitrogen imports year over year from January–August may reduce corn acreage and fertilizer application rates, straining production. The Ukraine farm minister recently suggested 2027 sowing area could fall by 17 per cent (pc) because of difficulties with selling last year’s crop. These same pressures are likely to felt by farmers around the world, placing downward pressure on global grain production, reducing stockholdings and supporting the trend of higher grain prices.
Spreads in local wheat market to reach record levels on higher freight costs
There’s a been little change to seasonal conditions in northern NSW and Queensland, which is having an obvious impact on grower sentiment in that they are aiming higher with their price targets and are reluctant to sell forward. This is supportive of the local market which has moved $15-$20/tonne higher in the past couple of weeks to $435/tonne delivered Downs.
A major factor in the higher prices is the cost of diesel and freight rates, making it harder for traders to buy grain from southern NSW as an alternative to the local sellers (who keep on increasing their price expectations).
This has created a two-speed grain market with spreads between grain prices in delivered feed grain markets and at southern export ports at record levels. Prices into southern up-country end users have held steady at $365/tonne with $390/tonne into southern ports supported by firm international values and a recent weakening in the Australian Dollar.
With prospects of a bumper yields across the south-east, harvest logistics and basis will come under pressure. This grain will be needed by importers through the year so should retain its value and revert to export parity as harvest selling eases.
In the west, an average crop looks to have a direct path to increased demand from Asia and prices should track strengthening international values through the marketing period.
This chart shows wheat prices at major Australian ports in WA, Victoria and NSW. Source: CGX.
Barley will find support from higher wheat prices increased domestic feed demand
The old crop barley market remains quite thinly traded with spot grazier demand trading at higher values than bids into Downs feedlots.
New crop barley values are being supported by higher wheat values. So far barley is continuing to trade a spread/discount of $20-$30/t to feed wheat, and feedlots will likely increase the percentage of barley in their ration. Barley is quoted at $415/t Downs, $335/t Riverina and $310/t Murray Bridge ($50/t discount to wheat).
Barley values in export port zones remain firm, reflecting increased global demand for feed grain and competition for feed from the northern drawing arc, as shorts appear before new crop arrives.
Through the year, barley should find improved export support as global feed grain prices recalibrate, and global corn stocks tighten on lower crops in Europe and the US shifting demand towards lower priced feed barley.
This chart shows barley prices at ports in WA and NSW. Source: CGX.
Southern Queensland prepares for a big sorghum plant, if it rains
Like with barley, the old crop sorghum market remains very thinly traded.
New season sorghum is out of the ground but struggling and the dry forecast means that there is not much interest in forward sales. So far there has not been a large sorghum plant through northern NSW and Queensland. Growers are looking for a change in seasonal conditions to plant the remainder and are likely to hold off until later in the year to build soil moisture reserves, and plant sorghum later to avoid the heat of summer.
There are some new season sorghum bids starting to get published and they’re currently at similar levels to old crop at $385/t Downs and northern NSW $405/t Brisbane. We are also waiting to see what Chinese buying demand looks like in 2027.
Canola tossed around at higher values by crude oil uncertainty
Smaller crops in Canada and Europe and improved access into China for both Canadian and Australian canola, combined with strong demand from the bio diesel sector should support strong canola pricing levels throughout the coming year.
The main risk to traditionally strong canola values, apart from a collapse in the crude oil price, is the imposition of US tariffs on Canadian canola products. So far canola and canola products have not been dragged into the trade war between Canada and the US.
Given that the US is Canada’s largest canola market, anything that threatens this trade would have consequences for other markets outside the US which would have to absorb additional Canadian canola increasing competition to Australia.
ABARES sees the Australian canola crop at 7.3 million tonnes, below last year’s record production of 7.7 million tonnes with higher yields and plantings across South Australia, Victoria and southern NSW unable to offset lower plantings in NSW and lower yields in WA.
This chart shows the value of GM and non-GM canola at WA ports. Source: CGX.
Lower Indian tariffs points to improving trade prospects
Indian demand remains subdued but there’s plenty of talk about the weak monsoon season impacting grain production. India is considering lowering import tariffs on a range of pulses to boost supplies and curb food inflation. Any reduction could be limited to lentils and yellow peas, with chickpeas excluded. India currently imposes a 10 pc import tax on red lentils and chickpeas and 30 pc on yellow peas. India has already allowed duty-free imports of pigeon peas and black gram until the end of the current fiscal year in March 2027.
The ABARES September Crop Report indicated that Australian chickpea production is forecast to fall by 52 pc to just over 1 million tonnes in 2026–27, with significant cuts to area planted and expected lower yields in major growing regions of northern New South Wales and Queensland.
The trade has now revised this production number to around 800,000 tonnes helping to fuel a $50 to $100/tonne rally in the past couple of weeks.
Unlike trends in chickpea production, Australia should harvest a record lentil crop on expanded plantings and strong yields across key growing areas in southeast Australia. ABARES says lentil production is set to rise 3 pc to a record 2.2 million tonnes. Prospects for a large crop and uncertainty around the extent of sub-continent demand has kept Australian lentil prices subdued but international market conditions look to be improving.
For faba beans, ABARES is projecting another large crop of over 1 million tonnes with production rebounding across SA and Victoria. The pricing outlook remains subdued with currency issues in Egypt reducing demand for Australian beans which have been running around 65 pc of normal pace. Faba bean export availability in Australia’s main competitors (United Kingdom and Baltic nations and Canada) has stagnated with beans starting to be included in feeding rations. In Australia, the animal feed sector has switched from peas to faba beans which provides Australia another outlet, allowing exporters to avoid periods of weak international pricing often linked to Chinese buyers stepping back from the market.
In Canada, Australia’s largest competitor in global pulse markets, total seeded area for pulses this year is projected to have declined significantly. Canadian farmers reported pulse crop plantings of 3.45 million hectares down 11 per cent from 3.9 million hectares and the lowest area since 2011.
This decline in plantings is largely attributed to weaker returns compared with competing crops, as well as the continued impact of import tariffs imposed by India and trade issues with China. Pea production for 2026–27 is projected at 3.3 million tonnes down from 3.9 million tonnes representing a 15 percent decrease from the previous marketing year.
Lentil production is estimated at 2.5 million tonnes, a substantial decline from the 3.36 million tonnes produced last year.
Similarly, Canadian chickpea plantings and production is expected to fall this year. Production is projected at 400,000 tonnes, a significant decrease from the 482,000 tonnes harvested last year.
Prospects are reasonable for a recovery in pulse prices through the year with India’s monsoon rainfall the worst in a decade, lower pulse production in Canada and problems accessing Black Sea supply.
Disruptions to Russian exports of peas and lentils to key customers India and China could see a shift in demand towards Australian and Canadian supplies and improve pricing, although much will be dependent on sub-continent production.
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.