(Bloomberg) — Australia raised its wheat crop forecast after strong winter rains improved growing conditions, just as the worsening Black Sea crisis creates additional demand for the country’s grain.
The Department of Agriculture said it expects a 2026/27 wheat crop of 29.9 million tons, according to a report released Tuesday. That’s around 12% higher than the government’s previous forecast in June and would be the eighth-biggest harvest on record.
Though wheat production is still expected to fall below last season’s 36 million tons, due largely to a decline in acreage, the latest forecast allayed some earlier fears around potential dry conditions and a shortage of farm inputs stemming from the war in the Middle East.
By contrast, Australian farmers had seen “an excellent start to the season” in most major grain-growing states, followed by above-average rainfall in South Australia and Victoria from May to July, the department said in its latest forecast. “This has resulted in the maturity of most crops being three to four weeks early, with well-above-average yield potential,” it said.
The revised forecast comes as global demand for wheat is rising. Fighting between Russia and Ukraine in recent weeks has severely constrained supplies from the Black Sea region, leaving buyers in Southeast Asia and the Middle East working hard to find other sources.
Rod Baker, an analyst with Bendigo Bank, said wheat exports from the state of Western Australia are forecast to be almost 1 million tons this month, which would be 29% above the September average for the past 15 years.
“Australia’s September wheat export program is among the strongest on record,” Baker said. In a report published Friday, Bendigo said these exports were “consistent with Australian wheat picking up demand a thinner Black Sea program has left on the table.”
In its report on Tuesday, the Department of Agriculture said Australian wheat prices were forecast to rise by about 6% off the back of strong domestic demand for feed grain and greater international interest in high-protein varieties.
“Many international producers used reduced applications of fertilizers in early 2026 due to price rises associated with disruptions across the Strait of Hormuz,” the department said in the report. “This is expected to lower the protein content of wheat produced globally.”
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