Australia enters the 2026/27 season with a more uneven and weather-dependent cropping area than in recent years. This reflects dry conditions across Queensland and northern New South Wales, alongside better seasonal starts in Western and South Australia. As a result, wheat area is declining, while barley, canola and pulses are gaining ground. Globally, markets remain well supplied – particularly for cereals – which is limiting near-term price upside. However, weather risks in key producing regions and rising farm inputs are expected to constrain production growth. This should keep markets broadly balanced, with price direction later in the season increasingly dependent on yield outcomes and geopolitically influenced trade flows.
Global wheat markets are transitioning from surplus toward a more balanced position, driven by rising farm input costs and weather-related challenges. Nevertheless, large carryover stocks continue to cap near-term price upside. In Australia, a smaller crop and reduced planting area – particularly in Queensland and northern New South Wales – are expected to tighten regional supply, and create a more fragmented market. A return of the 2018-2020 pattern, where Western Australian grain is shipped by sea to Queensland and New South Wales, is therefore increasingly likely.
Barley markets remain supported by resilient feed demand, both domestically and across key export markets in Asia and the Middle East. While global stocks remain comfortable following strong 2025 production, tightening supply prospects and steady livestock demand are expected to provide a price floor. In Australia, reduced feed grain availability in northern regions may shift barley demand toward the south and west, supporting prices.
The broader oilseed sector is supported by strong demand linked to biofuel policies and elevated energy prices, which are keeping canola stocks in check. In Australia, canola cropping area is expected to expand slightly, reflecting improved relative returns compared to wheat and favourable early-season moisture, particularly in Western Australia and South Australia. While this additional supply may temper local price upside at harvest, canola continues to benefit from rising European demand.
Elevated global fertiliser and diesel prices are increasing production costs and influencing cropping decisions. This is encouraging shifts toward lower-input crops and contributing to a reduction in total cropping area. While higher costs are likely to reduce grain supply this season, elevated diesel prices may also slow global grain movements later in the season, providing some underlying support to international grain prices and increasing grain availability upcountry.
Inflation is returning to the system, but this cycle is being driven by costs rather than demand. Energy is moving through the value chain, lifting input, processing, and logistics costs at a time when customers are increasingly constrained. The Iran conflict and disruptions around the Strait of Hormuz sit behind much of the pressure, with food and beverage inflation expected to run between 4% and 8% in 2026. Pricing is no longer keeping pace with costs, and margin pressure is building across the supply chain. At the same time, demand is becoming more uneven, with trade-down behavior gaining traction, while premium segments remain relatively resilient.
Weather and geopolitics have re-emerged as primary market drivers, but their impacts are uneven. A developing El Niño, potentially one of the strongest on record, is shifting risk to the edges of the season, particularly fall frost and global production variability. Wheat has become the focal point, with drought and frost driving the smallest US crop in decades and tightening global supply. Corn and soybeans present a contrasting picture, with strong planting progress pointing to large crops and reinforcing an already well-supplied global market.
This divergence extends across the broader system. Energy-driven disruptions continue to pressure logistics and input markets, with fertilizer and chemical costs expected to remain elevated into 2027. Animal protein markets are also split. Cattle supplies remain tight as drought slows rebuilding, while pork production is constrained by disease and softer domestic demand. In contrast, poultry and dairy continue to expand, with production growth weighing on prices in some segments.
Overall, the system is moving into a more fragmented phase. Cost pressure is persistent, demand is uneven, and performance is increasingly determined by product mix, supply exposure, and positioning along the value chain rather than by broad macro direction.
World Farming Agriculture and Commodity news -18 May 2026
Brazilian soybean farmgate prices have declined modestly in May. However, prices are down 6% on a year-on-year basis. Weaker basis, a stronger Brazilian real, and rising internal freight costs are compressing local soybean prices, despite stronger CBOT price levels.
Farmgate corn prices have fallen by 2% MOM in May. Strong competition from the US and Argentina increased corn availability during Q1 2026.
Brazilian soybean exports reached 16.7m metric tons in April, a10% rise compared to April 2025. A record harvest, combined with Brazil’s strong export competitiveness, supported the export program.
Corn exports in April totaled 0.5m metric tons, down 52% from the previous month. RaboResearch expects 2026 export volumes to fall below those recorded in 2025.
Meanwhile, safrinha corn conditions are good in Mato Grosso. However, in a few regions – such as Goiás, Minas Gerais, and Tocantins – weather conditions are drier than expected, which could reduce the total corn crop. RaboResearch forecasts total corn production at 137m metric tons for the 2025/26 season.
Austria's lower house of parliament approved legislation on Thursday halving value-added tax on foods the conservative-led government deems essential, the main hurdle the inflation-fighting measure needed to clear to become law, reported Reuters.
The text reduces VAT on items including milk, bread, eggs, rice, flour and some fruits and vegetables to 4.9% from 10% as of July 1.
The three ruling parties - the conservative People's Party, the Social Democrats and the liberal Neos - approved the legislation while the two parties in opposition, the far-right Freedom Party (FPO) and the Greens, did not.
The government estimates the measure will cost around €400 million ($464 million) and save the average household roughly €100 per year. It plans to fund it in part through a levy on retail parcel deliveries that could raise about €280 million a year and which has yet to clear the lower house.
The Greens said the measure did not go far enough in helping low-income households and criticised the fact that funding for it has yet to be secured.
FPO lawmaker Michael Fuertbauer criticised the selection of items that qualify, saying: "Rye bread will benefit, rye flour will not. Fresh French fries will benefit, frozen French fries will not. Salt will benefit, herb salt will not. Butter will benefit, herb butter... will also!"
The legislation must still clear the upper house and be signed into law but there is little doubt that it will.
($1 = 0.8626 euros)
Moscow and Beijing will ensure safety and analyse risks when increasing Russian meat exports to China, Reuters reported, citing a joint declaration on Wednesday after a recent outbreak of cattle disease in Siberian regions.
Data from Russia's agriculture safety watchdog showed the country's exports of meat to China, including frozen beef, increased by 19% to 254,000 metric tons last year. However, beef exports slowed in March, Chinese customs data showed.
"The parties will make joint efforts to expand the range and volume of meat product supplies from epizootically safe regions of Russia to China, including beef and pork by-products, while adhering to safety measures and based on risk analysis," the document said.
The statement, issued after talks between Russian President Vladimir Putin and Chinese leader Xi Jinping in Beijing on Wednesday, stressed the importance of agricultural trade between Russia and China. No agriculture deals were signed during the visit.
Authorities culled thousands of cows in Siberia in March due to an outbreak of pasteurellosis, sparking rare wartime protests by local farmers, who argued that treatment of the disease does not require culling.
The US Department of Agriculture's Foreign Agriculture Service (FAS) in a report cited "local sources and trading contacts" who alleged that "the scale of these measures may indicate an unconfirmed outbreak of foot-and-mouth disease".
The Russian agriculture watchdog agency said in March that allegations in the USDA report "were not true".
Russia obtained recognition from the World Organisation for Animal Health (WOAH) in 2025 as a territory free from foot-and-mouth, the highly contagious viral disease that usually requires mass culling.
Kazakhstan banned Russian meat imports, while authorities in China reported a small outbreak of foot-and-mouth disease which entered China via the northwest border, a region that touches Kazakhstan, Mongolia, Russia and other countries.
Russia views China as a key market for its agriculture products as it aims to boost exports by 50% by 2030.
