Australia's Department of Agriculture raised its 2026/27 wheat forecast to 29.9 million tons, about 12% higher than its June estimate and set to be the eighth-largest crop on record. The upgrade follows strong winter rainfall that improved conditions and eased prior worries about possible dryness and input shortages linked to conflict in the Middle East. Despite the lift, output is still projected to come in below the 36 million tons produced last season due mainly to a smaller planted area.
Officials reported "an excellent start to the season" across most major grain states, with South Australia and Victoria receiving above-average rain from May through July. As a result, most crops are maturing three to four weeks sooner than usual, and the department said yield prospects are well above typical levels.
With fighting between Russia and Ukraine curbing Black Sea shipments, buyers in Southeast Asia and the Middle East are seeking alternative origins. Rod Baker of Bendigo Bank said "Australia's September wheat export program is among the strongest on record." He noted that Western Australia's wheat shipments could total nearly 1 million tons this month, about 29% above the average September pace over the past 15 years. Bendigo added that this elevated activity aligns with Australian wheat capturing demand left by a thinner Black Sea program.
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The department expects Australian wheat prices to climb by about 6%, supported by robust domestic demand for feed grain and stronger overseas interest in high-protein varieties. It also highlighted a global quality concern: "Many international producers used reduced applications of fertilizers in early 2026 due to price rises associated with disruptions across the Strait of Hormuz," a shift that is "expected to lower the protein content of wheat produced globally."
