Australia’s Bigger Wheat Crop Can Cushion, but Not Replace, Black Sea Supply

Australia’s 2026–27 crop outlook has improved sharply since the June forecast. After drought-breaking rain in northern New South Wales and southern Queensland, alongside favourable conditions in other eastern and southern cropping areas, the government lifted its wheat estimate to 29.9 million tonnes and its total winter-crop forecast to 61 million tonnes. 14

That is a meaningful improvement for global wheat availability as attacks and bottlenecks disrupt Black Sea exports. But the revision should be viewed as a buffer, not a one-for-one replacement for lost Russian and Ukrainian shipments.

How the forecasts changed

Measure	June forecast	Revised forecast	Change
Wheat	26.7 million tonnes	29.9 million tonnes	About 12% higher
Total winter crops	54.5 million tonnes	61 million tonnes	About 12% higher

The June ABARES outlook had put 2026–27 wheat production at 26.7 million tonnes, while the June winter-crop estimate was 54.5 million tonnes. 910 The revised 61-million-tonne winter-crop figure is still forecast to be about 12% below the previous season.

The comparison with 2025–26 is important: ABARES estimated that season’s national winter crop at 68.4 million tonnes, with wheat production just under 36 million tonnes. 18 In other words, the new outlook represents recovery from the June estimate, but not a return to the previous season’s unusually strong production levels.

Why rainfall changed the outlook

The main shift came from the timing and location of rainfall. Dry conditions had threatened planting and yield prospects in northern New South Wales and southern Queensland. Rain in late May and June replenished soil moisture and allowed crops to establish within a more satisfactory yield-potential window. 15

Victoria and other southern cropping areas also benefited from favourable early-season conditions. Earlier reporting said rainfall in New South Wales and Queensland could expand wheat plantings and add several million tonnes of production in those states, while May rain improved already favourable soil moisture in Victoria and South Australia. 3

The improvement does not remove the season’s risks. Rabobank continued to flag elevated El Niño risk and the possibility of below-average rainfall during the growing season. Its later national wheat outlook of roughly 27 million to 30 million tonnes was conditional on avoiding a major spring dry spell and maintaining adequate farm-input supplies. 57

That range is broadly consistent with the government’s 29.9-million-tonne estimate. The two forecasts therefore tell a similar story: conditions have improved, but the final crop remains highly dependent on spring weather.

What Australia can—and cannot—do for the Black Sea market

The timing of the upgrade matters because Black Sea export logistics have deteriorated. Russian strikes have disrupted Ukrainian ports, vessels and grain infrastructure, while cargoes redirected to Danube routes have encountered serious congestion. Reuters reported that Ukrainian grain exports fell 75% in the first two weeks of August from a year earlier, and that as many as 70 vessels were waiting near the Sulina Canal for access to Ukrainian ports.

Importers are already responding to tighter availability and higher prices. Reuters reported that attacks on Black Sea grain infrastructure were raising food-security concerns for major buyers including Egypt and Indonesia, while benchmark Chicago wheat futures had gained more than 17% since the start of July. Chicago wheat later settled at $7.60¾ a bushel on August 27, its highest close since July 2023, according to reporting on the market move.

Australia’s additional 3.2 million tonnes of wheat relative to the June forecast can help absorb some of that pressure. More Australian supply gives buyers another origin to consider and may reduce the effect of a temporary shortfall in Black Sea shipments.

The limitation is scale and timing. Australia’s revised wheat crop is still below the previous season’s level, and a forecast increase is not the same as grain already harvested, exported and delivered. If Black Sea disruptions persist, logistics, freight, quality requirements and buyer access will determine how much Australian wheat can actually substitute for affected cargoes.

What the WEAT futures change means

The supply shock also helps explain why the Teucrium Wheat Fund, known by its ticker WEAT, has been given additional flexibility in selecting wheat futures contracts.

Teucrium’s benchmark is the Teucrium Wheat Index, which is based on a weighted average of three CBOT wheat futures contracts. The fund’s authorized alternative exposure allows it, at the sponsor’s discretion, to use KC Hard Red Winter Wheat futures and Hard Red Spring Wheat futures when position limits, accountability levels or price-fluctuation limits prevent it from holding enough of its usual benchmark contracts.

This does not change WEAT’s investment objective or replace its benchmark. It is an operational mechanism intended to help the fund maintain wheat exposure when market rules constrain the standard contracts.

The trade-off is that alternative contracts may not move exactly like the benchmark contracts. Differences in wheat class, delivery region, weather exposure and market demand can create temporary tracking differences; the fund’s disclosures also identify tracking error and futures-market risks.

The practical takeaway

Australia’s revised forecasts turn an early-season downside story into a more constructive one. Rain in New South Wales, Queensland and Victoria lifted expected wheat production by roughly 12% from June and raised the national winter-crop outlook to 61 million tonnes. 149

That improvement is valuable while Black Sea attacks restrict exports and push up prices. However, Australia is offering incremental resilience, not a full replacement for disrupted Russian and Ukrainian trade. The next decisive variables are spring rainfall, input availability, harvest results and whether Black Sea shipping can resume at scale.