Research

Australian 2026/27 winter crop forecast: Area and grain prices

21 May 2026 10:00 RaboResearch

Australia’s 2026/27 season is increasingly weather-driven, with east coast dryness, shifting crop mix, and tighter global balances shaping price risks.

Intro

    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.

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