Global grain markets are heading into a tighter supply situation in 2026-27 as demand for food, feed and biofuel production continues to rise despite lower output of major cereals, according to the latest reports released by the U.S. Department of Agriculture (USDA).
The USDA’s June 2026 World Agricultural Production and Grain: World Markets and Trade reports indicate that global production of wheat, rice and corn will decline from the previous year, while consumption is expected to continue expanding, resulting in lower ending stocks and increased pressure on international grain markets.
According to USDA estimates, global grain production is projected at 2.95 billion metric tonnes in 2026-27, down from 3.01 billion tonnes in 2025-26. The decline is primarily due to lower output of wheat, rice and corn, which together are forecast to fall by about 57 million tonnes compared with the previous season.
Despite the production decline, global grain consumption is expected to remain robust. USDA projects total corn, wheat and rice consumption to rise as demand grows across food, feed and industrial sectors, particularly for biofuel production.
Global wheat production is forecast at 820.1 million tonnes in 2026-27, down 3 percent from the previous year's record crop. Wheat consumption, however, is expected to remain firm due to population growth and rising food demand, particularly in South Asia and Sub-Saharan Africa.
Among major wheat-producing countries, Russia is expected to harvest 88 million tonnes of wheat. Improved rainfall has boosted winter wheat prospects, although excessive moisture has slowed spring sowing operations. Ukraine’s wheat crop is estimated at 23.5 million tonnes, supported by favorable weather during critical crop development stages. In contrast, Australia’s wheat production is forecast to decline sharply to 28 million tonnes due to persistent dryness and reduced planted area, while Pakistan’s wheat output is estimated at 29 million tonnes following yield losses caused by heat stress and late-season storms.
Turkey is expected to be one of the biggest gainers in wheat production. USDA forecasts a record wheat harvest of 22.5 million tonnes, driven by abundant rainfall and exceptionally high yields.
Global wheat trade is projected to decline by 6 percent in 2026-27 as lower export availability from countries such as Australia offsets higher shipments from Ukraine and Russia.
Rice markets are also expected to tighten. Global rice production is forecast at 537.8 million tonnes, marginally below last year's record level, while consumption continues to increase. As a result, global rice stocks are expected to fall by around 2 percent.
India remains the dominant force in global rice trade. USDA estimates that India will account for nearly 40 percent of global rice exports, supported by abundant domestic supplies and competitive prices. The country’s rice exports are forecast at 24.5 million tonnes in 2026, reinforcing its position as the world’s largest rice exporter.
The corn sector presents a mixed picture. Global corn production is projected at 1.30 billion tonnes in 2026-27, lower than the previous year. However, corn demand continues to rise, particularly for livestock feed and ethanol production.
India has emerged as one of the most dynamic players in the global corn market. USDA notes that India’s corn production has expanded significantly over the past five years, driven by growing demand from the poultry sector and the country’s ethanol blending programme. India’s corn exports for 2026-27 are forecast to increase to 1.5 million tonnes due to a larger crop.
Biofuel demand is becoming an increasingly important factor in grain markets. USDA highlighted that industrial use of corn has nearly doubled over the past five years in both India and Brazil, largely due to expanding ethanol production.
As consumption outpaces production, global ending stocks are expected to shrink. Corn stocks are projected to decline by 7 percent, while wheat and rice stocks are expected to fall by around 2 percent each.
The USDA assessment suggests that global grain markets will remain sensitive to weather developments, geopolitical disruptions and biofuel demand in the coming year. With stocks tightening and consumption continuing to grow, international grain prices could remain vulnerable to supply shocks despite generally comfortable carryover inventories entering the season.