NAPERVILLE, (Illinois): US farmers have just begun harvesting another huge corn crop, following last year’s bumper harvest.
But that apparent abundance in the top corn exporter masks a considerably less comfortable picture of world grain supply. Global corn consumption is forecast to exceed production by nearly 30 million metric tons in 2026/27.
According to the US Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimates released last Friday, the deficit would be the largest in more than three decades. Those supply concerns have already made an impression on prices. Corn, wheat and soybean futures have risen significantly in recent months, with Chicago corn staging a record 16percent rally in August alone, a time when prices are often under seasonal pressure. So why are global grain supplies tightening when US farmers are producing so much? Part of the answer lies elsewhere in the world, and even outside grains themselves.
GLOBAL GRAIN CUSHION THINS
Combined corn and wheat production among major exporting countries is set to fall sharply from last year, even as US farmers begin bringing in their second-largest corn crop on record.
The projected year-on-year decline across those exporters is the largest by volume since 1993/94 and the steepest percentage drop since 2012/13, a season marked by heavy US drought losses.
Although crop prospects have recently improved for some key wheat exporters, that has not erased the broader setback in exportable grain supplies. And beyond the major exporters, total world wheat production, like corn, is also expected to fall short of consumption in 2026/27. Export availability is another concern: combined Russian and Ukrainian wheat stocks are projected by the USDA to hit a 33-year high, as the war between the two leading suppliers continues to disrupt Black Sea trade. And the challenge may extend beyond this season.
GRAINS LOSING THE ACREAGE BATTLE
Over the last quarter-century, the world’s major agricultural exporters have dramatically expanded oilseed plantings, while grain acreage among key suppliers has stagnated. Harvested area across major oilseed and oilseed product exporters in 2026/27 is more than double its 2000/01 level. Major grain exporters have expanded acreage by just 5percent.
A closer look reveals that corn acreage has expanded substantially over that period, though wheat acres have contracted. In other words, the acreage constraint is not uniform across grains, but the overall contrast with oilseeds is unmistakable.
Yet grain demand continues to grow. Yield improvements have carried an enormous share of the burden, leaving less room for weather disappointments in years when grain acreage is relatively small.
Oilseeds are on the other side of the coin. Expanding acreage, particularly in Brazil, has been central to the explosion in global soybean production. But even there, acreage growth may be slowing.