Global grain markets enter transitional phase with rising risks for 2027

Global grain markets are entering a transitional phase in which currently adequate supplies are masking deeper structural risks for 2027 and beyond. This was stated by AgResource President Dan Basse during his presentation at the HUBUDER Conference in Ankara, organized by the Turkish Grain Suppliers Association.

Wheat and corn markets remain comfortably supplied in the short term; however, geopolitical tensions, fertilizer constraints, weakening farm profitability, and tightening exporter stocks are gradually shifting the market outlook from bearish in the near term to potentially more bullish in the longer run.

While the 2026/27 season is expected to remain broadly balanced, underlying risks across energy markets, input costs, logistics, and climate volatility are building conditions for a more unstable and price-sensitive grain environment in 2027/28.

A key concern highlighted by Basse is geopolitics, particularly developments in the Middle East and risks around the Strait of Hormuz. He stressed that disruptions in energy flows could quickly translate into higher fertilizer and chemical costs, directly affecting global agricultural production.

Basse also pointed to already rising fertilizer prices, especially urea, which are increasing production costs for corn and other major crops. In his view, this could lead farmers to reduce fertilizer application, ultimately limiting yields and tightening global supply in the medium term.

Despite currently ample global grain availability, Basse warned that farm profitability is under significant pressure, with the 2026 crop expected to be harvested at some of the lowest margins since 2019. High input costs combined with weak grain prices are discouraging investment and could slow future production growth.

While global demand growth from India and Africa remains a long-term story, China is no longer the primary driver of import expansion. At the same time, the United States is gradually losing export share and shifting toward domestic biofuel consumption, reshaping global price formation mechanisms.

Concluding his remarks, Basse said that although near-term grain supply remains sufficient, the combination of geopolitical risk, input constraints, declining exporter stocks, and climate uncertainty is laying the groundwork for a more bullish global grain market after 2027.

Tags: grain, prices