Wheat and Grains in Global Volatility – Winter 2025

Global volatility – from Covid-19 to the Russia–Ukraine conflict – has reshaped wheat and grain markets over the past five years. While supply-focused shocks previously pushed wheat into safe-haven behaviour, today’s trade-based uncertainty is producing the opposite effect. Despite tightening global stocks-to-use ratios, grain prices remain subdued and disconnected from traditional safe-haven responses. Read the full report.

Executive Summary / Key Takeaways

• Wheat acted like a safe-haven during supply shocks (Covid-19, Russia–Ukraine) but not during today’s tariff-driven volatility.
• Grains prices remain subdued despite global stocks-to-use ratios falling to decade lows.
• Oil and freight show stronger correlations with wheat prices than gold does.
• Australian grain price premiums are shaped mainly by exchange rates and freight costs.
• Barley and canola stocks-to-use ratios continue to tighten despite soft global pricing.

Market Context & Current State of the Industry

Winter 2025 sees global grains markets characterised by stable production, falling global stocks-to-use ratios and restrained pricing. Despite global uncertainty, grains are not responding as safe-haven assets the way they did during major supply disruptions earlier in the decade. Australia remains well-positioned in global markets, though export margins depend heavily on freight and currency movements.

Major Trends Shaping the Industry

Trend 1: Safe-haven behaviour breaking down

Wheat no longer tracks gold during periods of market uncertainty.

Key insight: Current volatility is trade-related, not supply-related.

Trend 2: Falling global stocks-to-use ratios

Wheat stocks-to-use expected to fall to 32.5 percent; barley at its lowest since early 1980s.

Key insight: Supply tightening is not lifting prices.

Trend 3: Oil and freight drive pricing

Wheat prices correlate more strongly with oil and freight than gold or uncertainty indexes.

Key insight: Logistics and input costs outweigh safe-haven dynamics.

Trend 4: Australian premiums shaped by currency

Exchange rate shifts and freight volatility determine domestic price margins.

Key insight: Strong AUD compresses margins; rising freight widens gaps.

Trend 5: Retreat from past price spikes

Wheat and grains prices continue to normalise post Russia–Ukraine highs.

Key insight: Markets are recalibrating as supply concerns ease.

Challenges & Risks to Watch

• Tariff and trade uncertainty reshaping global grain flows.
• Freight volatility influencing export competitiveness.
• Exchange rate risk affecting Australian grain margins.
• Weak global pricing despite tightening stocks.
• Geopolitical pressures increasing shipping uncertainty.

Future Outlook

Wheat and grains markets are likely to remain subdued until volatility shifts from trade constraints to supply concerns. Australian grain performance will remain tied to freight, currency movements and domestic seasonal outcomes.

Conclusion

Wheat and grains exhibit safe-haven behaviour only when volatility affects supply or demand directly. Current trade-focused uncertainty has weakened this relationship, leaving prices subdued. Australia remains resilient, but margins will continue to depend on freight and currency dynamics.

Next steps

• Download the full version of ANZ Agri InFocus: Australian Wheat & Grains.
• Explore more of our Agribusiness banking services.
• Talk to one of our specislists by requesting a call back.