FAO has lowered its forecast for global cereal production in 2026 to 2.98 billion tonnes, with worsening maize prospects driving most of the latest downgrade. Although the world is heading for its second-largest cereal harvest on record, restricted Black Sea export routes are expected to leave more wheat in Russia and Ukraine while encouraging importers to diversify their origins.

Global cereal production is forecast to decline by 2% in 2026, marking the sharpest annual contraction since 2018, according to the latest Cereal Supply and Demand Brief released by the Food and Agriculture Organization of the United Nations.

FAO lowered its production forecast by 3.4 million tonnes from July to 2.98 billion tonnes. This would be 61.1 million tonnes below the record output achieved in 2025, although it would still represent the second-largest global cereal harvest on record. The latest downgrade was driven primarily by deteriorating maize prospects, particularly in the European Union.

EU CROP LOSSES WEIGH ON MAIZE OUTLOOK

FAO now forecasts global maize production at 1.309 billion tonnes, 0.6% below its June projection. Persistent summer heat and dryness have damaged crops in key central European production areas, particularly France and Poland, pushing expected yields below their five-year averages.

Smaller reductions were also made to the production forecasts for India and Paraguay. These cuts more than offset improved prospects in Argentina and Brazil, where better-than-expected yields are expected to support well-above-average harvests.

The regional imbalance is likely to reshape maize trade during the 2026/27 season. Europe’s import requirements are expected to increase following the deterioration in its domestic crop, while strong global demand and competitive prices are set to reinforce the United States’ position as the world’s largest maize exporter. Argentina’s maize exports are forecast to reach 39 million tonnes, bringing its shipments close to those of Brazil.

WHEAT FORECAST RAISED, BUT OUTPUT REMAINS BELOW LAST YEAR

Unlike maize, FAO raised its forecast for global wheat production by 4.2 million tonnes to 810.7 million tonnes. Improved yield expectations lifted production estimates for Canada and Morocco by around 1.5 million tonnes each, while the forecasts for Russia and Ukraine were also revised upwards.

These increases outweighed further reductions for the European Union and the United Kingdom, where sparse rainfall and high temperatures curtailed yield potential.

Despite the latest upward revision, world wheat production is still expected to fall by 32 million tonnes, or 3.8%, from the 2025 level. Wheat would therefore account for more than half of the projected 61.1-million-tonne decline in total cereal production, although the crop would remain the second largest on record.

BLACK SEA CONSTRAINTS ALTER THE DISTRIBUTION OF SUPPLY

World cereal stocks are forecast to reach 947.2 million tonnes by the close of the 2027 seasons, only 0.2% above their opening level and 10.7 million tonnes below FAO’s July forecast.

Global wheat inventories are forecast to rise by 7.4 million tonnes from the previous season to 350.2 million tonnes in 2026/27. FAO expects part of this build-up to occur in Russia and Ukraine, where restricted Black Sea export routes and insufficient alternative capacity are limiting shipments. At the same time, global wheat trade is projected to fall by nearly 12.9 million tonnes, or 6.1%, to 197.2 million tonnes.

Evolving shipping conditions, higher logistics risks and capacity constraints on alternative routes continue to create uncertainty over the timing and geographical distribution of Black Sea supplies. As a result, FAO noted that importers are considering greater diversification, supporting shipment prospects for competing origins.

Coarse-grain stocks present a tighter picture. FAO cut its forecast for ending inventories by 13.5 million tonnes, including reductions for both maize and barley. Strong US maize exports, weaker production prospects in the EU and Paraguay, and sustained Chinese demand for feed barley are expected to limit stock accumulation.

The global cereal stocks-to-use ratio is projected at 31.6%, down from 31.9% in 2025/26. FAO said this still represents a relatively comfortable supply position by historical standards, but the regional concentration of stocks and difficulties in moving them to deficit markets remain important sources of risk.

CEREAL TRADE TO RETREAT FROM RECORD HIGH

Global cereal utilization is forecast to rise by 5.5 million tonnes, or 0.2%, to 2.965 billion tonnes in 2026/27. Consumption of coarse grains and rice is expected to grow, while wheat use is projected to decline from the unusually high 2025/26 level, when abundant supplies encouraged greater use of wheat in animal feed and industrial applications.

World cereal trade is forecast at 509.3 million tonnes. Although this represents a 1.7-million-tonne upward revision from July, it would be 15.2 million tonnes, or 2.9%, below the record volume traded in 2025/26. Wheat would account for almost 85% of that contraction, with global wheat trade forecast to fall by 12.9 million tonnes to 197.2 million tonnes.

Barley trade was revised down following reduced export forecasts for the EU, Russia and Ukraine, only partly offset by continued shipments from Australia and Canada, particularly to China.

Global rice production is forecast at 553.1 million tonnes on a milled basis, down 1.9% from the previous season’s record. FAO attributed the decline to weaker producer margins and adverse weather conditions associated mainly with El Niño. With rice utilization projected at 559 million tonnes, global carry-over stocks are expected to decline by 2.7% from their record opening level.

International rice trade is expected to reach 60.5 million tonnes in 2026, also 1.9% below its 2025 peak, as softer demand from parts of Asia and Africa outweighs stronger import prospects for the Philippines.