Grain Snippet: Northern Hemisphere Harvest Hampers Prices
Over the past month, new crop wheat prices in SA and VIC have declined by approximately $25/MT, while old crop values have eased by around $15/MT. Local cash markets have been pressured by widespread rainfall across Australian cropping regions, improving production prospects, alongside bearish global influences including progress towards a US-Iran agreement and advancing Northern Hemisphere wheat harvests. A weaker Aussie dollar has helped offset some downside pressure for June to-date.
Australian wheat-growing regions received widespread rainfall throughout June, resulting in favourable soil moisture conditions and supporting crop establishment. As a result, production prospects have improved compared with earlier in the season. However, longer-term weather risks remain. Forecasts continue to indicate a record-strength El Niño index developing into spring, increasing the likelihood of warmer and drier conditions, along with elevated frost risk during the critical growing period. ABARES currently forecasts Australian wheat production at 26.7MMT, reflecting lower planted area and higher fertiliser costs, while broader market estimates remain closer to 28MMT.
In the United States, winter wheat harvest progress has reached 40%, well ahead of both last year and the five-year average. Seasonal harvest pressure continues to weigh on wheat futures, with December 2026 SRW wheat futures declining over the past month. More recently, futures appear to have established support near 610USc/bu.
Across major wheat exporters, total 2026/27 wheat production is currently estimated at 388.5 MMT, down a substantial 48.2 MMT year-on-year but returning to more average levels. Notably, the 2025/26 season resulted in multiple bumper crops for major exporting nations leading to a higher carry-in supply; whilst 2026/27 production is anticipated to be lower in comparison, the world wheat stocks-to-use is forecast to remain steady.
The latest WASDE report revised Russian wheat production higher to 88 MMT, up 2 MMT from the previous forecast due to favourable crop conditions. Russian spring wheat seeding progress remains behind schedule, with approximately 72% of intended area planted as of early June. In Europe, 2026/27 wheat production is forecast at 136 MMT, down from last year but slightly above the five-year average. In Canada, spring wheat seeding is nearing completion, with crop conditions reported at 90% good-to-excellent compared with 64% at the same time last year.
US-Iran negotiations progressed with a preliminary Memorandum of Understanding (MoU) signed on June 17th to reopen the Strait of Hormuz; however, Iran re-declared the strait closed over the weekend, citing ceasefire violations in Lebanon with uncertainty regarding the final outcome now uncertain. Given Australia’s reliance on imported fertiliser, prolonged disruption and subsequently elevated import costs would sustain pressure on local fertiliser availability, whilst keeping prices high and grower margins tight.
While improved crop conditions across several key exporting regions have weighed on markets recently, the threat of a strong El Nino in the second half of the Australian growing season is limiting local pressure and grower selling liquidity.
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