Wheat stuck in neutral as Global Trade begins to shift

The US is the cheapest origin at the moment and is seizing much of the importer interest. Russian FOB values remain elevated because of slow farmer selling and the costs associated with getting grain to port from the central regions. This has also allowed French wheat to feature in some non-routine tenders which has been rare in recent years.

Australia is also seeing some late ‘out of season’ demand for old crop business into Southeast Asia at a time when Black Sea grain would normally dominate the export grid.

On the balance sheet side, major exporter stocks-to-use ratios have shifted from comfortable to relatively tight, suggesting that prices should at least remain stable. While my bias leans toward higher prices, several headwinds weigh on the short to mid-term outlook: a delayed but large Russian crop, subdued Chinese buying, a record corn harvest competing for Asian feed demand, and solid Southern Hemisphere production prospects.

Geopolitics, and in particular the trade dispute sparked by Trump’s tariffs, are beginning to reshape global grain flows. According to Reuters, Southeast Asian nations are emerging as key players, with Indonesia and Bangladesh already committing to larger US grain purchases under agreements that reduce tariffs on their exports to the US. Regional grain traders also report that Vietnam, the Philippines and Thailand are preparing to step up feed grain imports under similar arrangements. This has the potential to displace more ‘natural’ trade flows from Australia, Canada or the Black Sea that have freight or price advantages.

Looking for a bright spot, futures markets show strong carry, with deferred contracts trading well above spot levels (e.g., Dec ’25 at 531c/bu versus Dec ’26 at 599c/bu). This reflects the growing importance of next season’s production across all major exporters.