Speaking at the IDMA Global Grain & Milling Forum in Istanbul, Alexander Karavaytsev, Senior Economist at the International Grains Council, said global wheat production in 2026/27 is forecast to fall by 3% from the previous year’s peak, but overall supplies are expected to remain ample thanks to record carry-in stocks. Karavaytsev highlighted El Niño risks, smaller crops in major exporting countries, weaker import needs in some key destinations and the growing importance of freight, logistics and currency movements in shaping global wheat trade.

Alexander Karavaytsev, Senior Economist at the International Grains Council (IGC), presented the key narrative points for the 2026/27 global wheat market at the IDMA Global Grain & Milling Forum in Istanbul. Speaking during the first session titled “Global Grain Trade: Trends, Risks & Opportunities”, Karavaytsev provided a neutral global outlook on wheat production, supply, demand, stocks, trade flows and price dynamics. His presentation showed that while global wheat output is expected to decline from the previous season’s record level, the market is not facing a supply shortage.

According to IGC figures presented by Karavaytsev, world wheat production in 2026/27 is projected at 821 million tonnes, down 3% year-on-year, or 24 million tonnes below the previous season’s peak. However, this would still be the second-largest wheat crop ever recorded.

EL NIÑO ADDS UNCERTAINTY TO THE OUTLOOK

Karavaytsev opened his market analysis with El Niño, noting that the phenomenon had effectively started and could influence weather patterns across several major producing regions. He explained that El Niño is linked to changes in tropical Pacific Ocean surface temperatures, which can shift rainfall patterns around the world. While often presented as purely negative, Karavaytsev stressed that its impact varies by region. Some countries may face drier or hotter-than-normal conditions, while others may benefit from improved rainfall.

For wheat markets, Australia is one of the key regions to watch. Karavaytsev said the Australian crop could be particularly exposed to El Niño-related risks. Other areas potentially affected include parts of Southeast Asia, India and the United States, although the relevance varies by crop and region. At the same time, he noted that South America, particularly Argentina, may benefit from the rainfall patterns associated with El Niño. This makes the weather outlook more complex than a simple global supply threat.

SMALLER EXPORTER CROPS, STRONGER OUTPUT IN SOME IMPORTING REGIONS

A central point in Karavaytsev’s presentation was the contrast between declining production in major wheat exporting countries and stronger crops in selected importing regions. IGC data point to a broad decline across major exporters in 2026/27. Production among key exporting countries is forecast to fall by around 42 million tonnes year-on-year. This includes smaller crops in several major suppliers, with particular attention on the United States, Australia, Argentina and parts of the European Union.

Karavaytsev said the United States had faced persistent dryness affecting hard red winter wheat, later compounded by untimely rains during harvest, raising concerns not only about volumes but also quality. In the European Union, unprecedented heat and dryness in western areas have made headlines, although conditions in eastern and central Europe, including Romania and Bulgaria, appear more favorable.

In Russia, smaller spring wheat potential may be offset by a good winter wheat crop. Ukraine is also expected to remain an important supplier, although logistics and war-related risks continue to matter.

By contrast, several importing regions are expected to see strong production. Karavaytsev pointed to record or near-record crops in North Africa, Northeast Asia, India and China. North Africa, in particular, is expected to see a strong rebound, supported by favorable weather and government efforts to encourage production. India is another important variable. Although it is usually a largely domestic wheat market, Karavaytsev said the country could become a net exporter if price conditions are favorable.

AMPLE SUPPLY DESPITE LOWER PRODUCTION

Despite the smaller global crop, Karavaytsev emphasized that total supply will remain comfortable because of large opening stocks. According to the IGC presentation, global wheat supply in 2026/27 will be supported by a record carry-in from the previous season.

IGC figures show global opening stocks at around 286 million tonnes for 2026/27. Ending stocks are expected to tighten slightly, but remain adequate at around 280 million tonnes. This means the reduction in production does not automatically translate into a supply squeeze. However, Karavaytsev added an important qualification: the location and accessibility of stocks matter.

For example, in Russia, some carryover stocks are located far from export ports, including Siberia and central regions. Moving grain from these areas to southern ports involves high rail transportation costs, and without subsidies, some volumes may not be economically exportable. This distinction between statistical supply and accessible export supply is particularly important for millers, traders and import-dependent markets.

PRICES LITTLE CHANGED, BUT FREIGHT REMAINS A KEY BURDEN

Karavaytsev also discussed wheat price dynamics. He noted that wheat export prices had been heavily influenced by energy markets earlier in the season, but had recently decoupled from crude oil movements. According to IGC data presented at the forum, as of 18 June 2026, the IGC GOI wheat sub-index was only 1% higher year-on-year, while ICE Brent crude oil was 4% higher year-on-year. This suggests that wheat prices were broadly close to year-earlier levels despite the evolving production risks.

However, freight costs tell a different story. Karavaytsev emphasized that while freight rates had retreated in recent weeks, they remained well above year-ago levels. This is highly relevant for importers because the delivered cost of wheat depends not only on FOB prices but also on ocean freight. For importers in North Africa, the Middle East and Asia, elevated freight costs may influence purchasing decisions and encourage delayed buying, particularly when buyers expect further seasonal price pressure.

WHEAT TRADE SET TO CONTRACT IN 2026/27

After a strong rebound in the previous year, global wheat trade is expected to contract in 2026/27. IGC data presented by Karavaytsev show world wheat trade falling by 4% year-on-year, from around 214 million tonnes in 2025/26 to about 205 million tonnes in 2026/27. This expected contraction is linked to better crops and sizable carry-in stocks in some key importing countries. North Africa, for example, is expected to import less overall because of improved domestic production. However, Karavaytsev cautioned that import needs may not fall as sharply as some expect in every case. Morocco, for instance, may still need milling wheat imports if domestic protein levels are low.

Pacific Asia remains another important region. Karavaytsev said some countries in the region accumulated significant stocks in the previous season, including supplies from Argentina. This may allow buyers to delay purchases while waiting for prices to ease.

BLACK SEA AND EU COMPETITION WILL BE TOUGHER

On the export side, Karavaytsev said smaller surpluses in the Southern Hemisphere and the United States are likely to limit shipments from some origins. According to IGC figures, 2026/27 exports are forecast at around:

• Russia: 47.5 million tonnes 
• EU-27: 29.6 million tonnes 
• Canada: 29.5 million tonnes 
• Australia: 23 million tonnes 
• United States: 21 million tonnes 
• Ukraine: 16 million tonnes 
• Argentina: 14 million tonnes 
• Kazakhstan: 9 million tonnes 
• India: 1.9 million tonnes 

Karavaytsev said the Black Sea region and the EU are well placed to meet demand, but much will depend on logistics, foreign exchange rates and farmer selling. Russia’s large winter wheat crop, especially in southern regions close to export ports, could generate early-season harvest pressure. However, the ruble exchange rate, rail logistics, port capacity, fuel availability and export margins will all influence how competitive Russian wheat becomes. Ukraine may also increase exports, but logistics and port infrastructure remain key constraints.

TURKEY AND MOROCCO MAY CONTRIBUTE TO WEAKER EARLY-SEASON DEMAND

One of the important points in Karavaytsev’s presentation was the role of Turkey and Morocco in early-season demand. He said a large Russian winter wheat crop, combined with subdued demand from Turkey and Morocco, is likely to create early-season harvest pressure. In Turkey’s case, strong domestic production and sufficient supply could reduce immediate import needs. Morocco, meanwhile, introduced a temporary import duty until 1 August, limiting near-term buying interest. This combination could create a quieter demand environment at the beginning of the season, intensifying competition among exporters.

INDIA COULD CAP PRICE UPSIDE LATER IN THE SEASON

Karavaytsev said firmer wheat prices could emerge in the second half of the season if smaller Southern Hemisphere harvests are confirmed, especially in Australia and Argentina. However, any upside may be capped by India stepping into the export market. India is currently expected to export around 1.9 million tonnes of wheat, mainly to neighboring countries such as Bangladesh and Nepal, and possibly some Pacific Asian destinations. But if global prices rise sufficiently, India could act as a “valve” by supplying additional volumes to the market. Questions remain over the quality and protein content of Indian wheat, but Karavaytsev suggested India could become an important balancing factor if market conditions change.

LOGISTICS, VOLATILITY AND FARMER PROFITABILITY WILL REMAIN KEY RISKS

During the discussion, Karavaytsev was asked what the grain trade might be discussing five years from now. He identified three major issues: farmer profitability, price volatility and logistics.

He said farmer profitability will remain a structural concern, especially when production is strong and prices are under pressure. He also noted that price volatility is becoming more difficult to manage because markets react increasingly quickly to headlines, futures movements and algorithmic trading.

Logistics, he added, is becoming a bigger challenge because climate change is affecting both maritime and inland transportation. Low water levels, floods and disruptions on major rivers such as the Rhine, Danube and key U.S. waterways are increasingly important for grain flows.

MARKET OUTLOOK: COMFORTABLE, BUT NOT RISK-FREE

Karavaytsev’s overall message was measured. The global wheat market is not facing a shortage scenario, but neither is it free from risk. Supplies are expected to remain ample thanks to record carry-in stocks, even as production falls from the previous year’s peak. Stocks are likely to tighten but remain adequate. Trade is expected to contract, while exporters will face tougher competition in some destinations because of stronger crops and carry-ins among importers. At the same time, El Niño, freight costs, logistics, currency movements, quality concerns and shifting demand patterns all remain critical variables.