Argentina's record wheat production for the 2025-26 marketing year will continue to roil global markets in 2026, with a flood of low-protein wheat pushing feed prices lower as well as reshuffling trade flows to buyers for higher-protein wheat.
Argentina is expected to grow 27.7mn metric tonnes (t) of wheat for the 2025-26 marketing year, the Rosario Board of Trade (BCR) said on 11 December, compared with its output of 23mn t in the prior marketing year.
Both the BCR and the Buenos Aires Grain Exchange (Bage) have raised their forecasts multiple times in recent weeks as a result of record-high yields as the harvest progresses. Steady rains and good crop conditions during development have led to the high yields.
Argentina's record harvest will add to a bigger crop expected in 2025-26 compared with a year earlier from other major wheat exporters, most notably the EU, Australia, and Russia. The US Department of Agriculture (USDA) forecasts an almost 5pc increase in the world's wheat output to 837.8mn t for 2025-26.
Ample supply globally has weighed on wheat prices in exporting countries for months. The Argus price for the standard 11.5pc protein wheat in Argentina's upriver ports reached a 20-month low of $206.5/t in mid-October.
That said, the record yields have resulted in unusually low protein content on average in the country's crop, raising concerns about the availability of milling-quality 11.5pc wheat. Reports put protein levels as low as 8-9pc in parts of Cordoba province, one of Argentina's top three wheat growers, as the harvest progressed into December.
The south of Buenos Aires province — which often has higher-protein output than other areas — also only showed an average protein content of 9-10pc, based on a November crop tour of Bahia Blanca Grain and Products Exchange, extinguishing previous expectations that the region could deliver some 11.5pc wheat.
The protein quality concern has subsequently pushed the price of 11.5pc wheat from Argentina back to a seven-week high of $217/t in the week of 15 December. The premium of 11.5pc over 10.5pc wheat has also widened, reaching as much as $15-$20/t early in the same week compared with less than $10 at the end of November.
Buyers have had to cancel some export contracts and seek alternatives as wheat of lower quality than expected arrives at Argentinian ports.
Quality concerns reshuffle trade flows
The flood of low-protein wheat from Argentina is likely to continue to weigh on prices of feed wheat in global markets, a boon for buyers of that grade, while the lack of supply of 11.5pc and higher from the South American country is already boosting sales of those grades from other suppliers.
Brazil — historically the biggest market for Argentinian wheat thanks to the geographical proximity — has already turned to other wheat exporters this season, as a result of a lack of high-protein wheat in Argentina's harvest this year.
Brazilian buyers have bought at least two shipments of a total of more than 60,000t of Russian milling wheat scheduled to ship to Brazil in December, according to recent lineup data.
Some southeast Asian millers are mulling a switch to Argentina's 10.5pc protein wheat, as long as other specifications are met, market participants said. But others in the region continue to insist on higher-protein wheat, they added, which could open the door for imports from Australia.
Southeast Asia has been an important buyer of Argentinian wheat, with Indonesia, Bangladesh and Vietnam having purchased 1.95mn t out of 12.63mn t of Argentinian exports from the 2024-25 marketing year through November.
