Rodolfo Buhrer/Reuters
Wheat prices have spent much of 2024 and 2025 in a volatile but range-bound environment, after declining sharply from the 2022 highs driven by the Russia–Ukraine conflict. The key question is no longer whether prices have bottomed, but whether supply dynamics and current geopolitical risks will re-introduce upward pressure. Where are wheat prices heading and what is driving them there?
Wheat markets today are shaped by three dominant forces: Continued Black Sea export dominance (Russia in particular), unpredictable weather in North America and Australia, and a tightening global stock-to-use (inventory versus annual consumption) balance. Global wheat production has remained resilient, but production for 2025/26 is projected at 800 to 805 million metric tons (MMT) with consumption at 810 to 815 MMT. This marks a continued structural deficit.
Seventy per cent of global wheat production is concentrated in the top seven producing regions: China produces 137 MMT annually, followed by the European Union (134), India (108), Russia (92), and the U.S. (47). Canada’s annual wheat production ranks sixth globally at 40 MMT and Australia produces 36 MMT on average.
Russia, Australia, Canada and the U.S. have the largest volume of wheat available for trade at 45, 28, 27 and 25 million metric tons respectively. More than half of Canada’s wheat export leaves through the port of Vancouver heading for Asian markets. Russia has been growing its wheat exports to the West by using lower prices to overcome longer shipping distances. The country has cemented its position as the dominant global exporter, often accounting for 20 to 25 per cent of the global wheat trade.
Statistics Canada reported record total wheat production of 40 MMT in 2025, made up of 29.3 MMT spring wheat, 7.1 MMT durum, and 3.6 MMT winter wheat. That bumper crop also pushed Canadian wheat stocks to 27.5 MMT as of Dec. 31, 2025, confirming that Canada entered 2026 with a comfortable supply cushion.
Wheat is classified based on growing season, hardness, colour and shape. Winter wheat is seeded in the fall, harvested in the spring, and comprises around two-thirds of wheat grown in the U.S., according to the U.S. Department of Agriculture. In Canada, only 8 per cent of wheat produced is winter wheat, mostly concentrated in southern Ontario. Hard winter wheat is used to make different types of breads and noodles, while soft winter wheat is used for cakes, pastry, cereal and biscuits.
With its high protein content and workability, Canada Western Red Spring Wheat (CWRS) is ideal for high-volume pan breads and rolls. Durum is the hardest of all wheats and has a high protein content that is excellent for pasta. Canada typically accounts for about half of the world’s durum wheat trade and 15 per cent of global production.
Canada’s durum wheat production has been volatile over the past five years. In 2025, production reached a high of 7.1 MMT, up substantially from the drought conditions levels of 3 MMT in 2020-2021.
Weather outlook:
The 2026/2027 North American climate is projected to shift from lingering La Niña conditions in early 2026 toward a rapidly developing, potentially strong El Niño by late 2026 and into 2027. This indicates a transition to warmer, drier conditions for much of Canada and the U.S.
Oil and wheat
With the volatility we are seeing in the oil markets, it is good to look at how the price of oil could affect the price of wheat.
Oil and wheat usually move in the same direction during shocks, but wheat does not behave like a simple oil proxy. Data from the U.S. Bureau of Labour Statistics showed crude oil rose 50.1 per cent in price from June, 2010, to June, 2011, while wheat rose 91.3 per cent. From June to September 2012, oil rose only 6.9 per cent while wheat still rose 29.9 per cent, showing that oil can amplify wheat moves but weather and supply shocks often dominate the size of the move.
Price:
We are now four years into the Russia-Ukraine war. Wheat prices spiked during the invasion, climbing to US$1,200 per metric ton. Prices have been trading in the range of US$200 to US$300 per metric ton for the last three years now.
Since 2024, Russia has solidified its position in global wheat markets by consistently underpricing competitors, often by US$10–$30 per metric ton, effectively setting the global price floor. This advantage is supported by lower production costs, a weaker ruble, and significant investments in export infrastructure through ports such as Novorossiysk and Taman, which have improved its ability to move large volumes efficiently.
Russia has also strategically expanded its presence in key import markets such as Egypt and Turkey by offering lower prices and flexible trade arrangements. As a result, Russia now acts as the primary price setter in global wheat markets. Canada’s advantage lies in being a premier quality exporter of high protein wheat, with more than half of our exports destined for Asia, allowing us to compete on quality rather than price.
As far as the price outlook is concerned, markets remain balanced but vulnerable to disruptions. The stock to use ratios are low but not critically tight, allowing markets to price in adequate supply with a small risk premium. Wheat prices therefore over the next two years are more likely to be range-bound, barring a major political or weather shock. Russia remains the price floor for the foreseeable future.
Brian Donovan, CBV, is the president of StockCalc, a Canadian fintech based in Miramichi, N.B.