Reuters analyst Karen Brown expressed this view while analyzing the USDA’s July report. According to USDA estimates, global wheat and corn harvests for the 2026/27 season will remain above long-term averages. However, the balance is gradually deteriorating. While wheat production exceeded consumption by 2.3% in the 2025/26 season, in the new season, conversely, global consumption is expected to be 0.8% higher than production. In the global corn market, the situation is even more strained. After a comfortable, nearly balanced market last season, a production shortfall (relative to demand) of 1.8% is projected for the new marketing year. This is the most unbalanced market condition in the past 16 years.
Karen Brown notes that it is becoming increasingly difficult to expand grain production. Producers are increasingly favoring oilseeds, which offer higher profitability. Meanwhile, high fertilizer prices, weather risks, and economic uncertainty are holding back the expansion of wheat acreage. This is precisely why grain acreage is shrinking in many exporting countries.
In the U.S., wheat acreage for the 2026/27 season fell to its lowest level since official records began in 1919, as farmers are shifting to corn and soybeans. Similar trends are observed in Russia, where record-high acreage planted with sunflowers and canola is displacing wheat, in Canada—due to record rapeseed plantings—and in EU countries, where some land is also being converted to oilseed crops. In Australia, wheat acreage is shrinking due to dry planting conditions.
Risks Are Rising
A reduction in production reserves means that even localized weather problems can quickly affect the global market. As an example, Karen Brown cites France, where drought could cause the corn harvest to fall to its lowest level in nearly 50 years. At the same time, countries such as the United States are capable of shifting export flows to offset grain shortages in specific regions.
Separately, Karen Brown emphasizes that markets must distinguish between production and logistics risks. She notes that problems with Ukrainian grain exports in previous years were ultimately partially offset by alternative supply routes. Similarly, the current disruptions in maritime shipments of Russian grain may primarily affect logistics but will not necessarily result in a loss of the harvest itself.
As global production reserves shrink, production risks are becoming an increasingly important factor in price dynamics. Logistical problems can usually be overcome over time, whereas compensating for crop losses is significantly more difficult, making weather conditions and crop patterns key drivers of the global grain market in the coming years.
