Baltic routes, importer shifts and El Niño test grain markets

Key takeaways

• Few Russian grain shipments have left through the Black Sea this month, and Ukrainian grain and oilseed exports remain subdued with a strong dependency on Danube ports.
• Russian wheat is rerouting to Baltic Sea ports, but port capacity is a significant limiting factor. Vysotsk handles a little over 300,000 tonnes a month and Ust-Luga around 500,000 tonnes.
• Russian and Ukrainian wheat exports from July to September saw the lowest volume since 2012, with the Middle East and North Africa the most exposed.
• Kpler currently estimates Russian wheat exports at 37 Mt for 2026-27, notably below what would typically be expected following harvest of a 88 Mt crop .
• Panamax timecharter earnings averaged near  $18,500/day in 2026 to date, against $13,361/day for last year as a whole, while bunker costs add nearly $5 a tonne to US Gulf to China freight.
• Kpler estimates that US corn ending stocks could increase above the latest forecast by the US Department of Agriculture (USDA), as well as a stronger US soybean export campaign.

Black Sea flows remain minimal 

The Black Sea picture is stark. Vessels sit at anchor offshore, waiting to enter the Danube to load, and the backlog is large. Ukrainian shipments from Izmail and Reni are vital for the export campaign, though volumes are relatively low. Only a few Russian shipments have been observed through the Black Sea during October, while Baltic Sea activity remains elevated.

Fleet data shows a shift in vessel size rather than a fall in vessel numbers. The count of vessels in the Black Sea has not dropped, despite recent attacks on ships. Total deadweight is slipping slightly, because the Danube trade relies on smaller vessels.

Romania and Bulgaria are the bright spots. Romanian exports are strong and Bulgarian outflows are stable. The TTS terminal in Romania ships domestic product and also transships Ukrainian grain that arrives by barge from the Danube.

Ukraine faces a structural limit. The Danube river ports cannot export the same volume that its three major Black Sea ports can handle. Due to low prices and storage considerations, some farmers are reportedly delaying the corn harvest.

Russia pivots to the Baltic, but capacity is the constraint

Russian wheat is still being exported. The majority of cargoes now originate from Baltic ports such as Vysotsk, Ust-Luga, and St Petersburg. Wheat exports from these ports have been building, and have the potential to exceed records observed in September. 

Ust-Luga is a large industrial port zone where wheat competes for capacity with fertiliser and coal, both in strong demand. Rail wagons are piling up outside some ports, and domestic reports point to a shortage of wagons. Grain now travels about 2,000 kilometres north rather than a much shorter distance south, increasing the average voyage duration for Russian wheat.

The numbers show progress, but a long way to go. September Baltic volumes reached a record of around 1 Mt, with potential for a stronger performance in October. Kpler estimates total Russian wheat exports close to 2.8 Mt for October, up from around 2.4 Mt in September. However, exports for either month remain close to half what has been seen in previous years.

Overland exports are helping. Non-seaborne channels usually move 300,000 to 400,000 tonnes a month, but they have recently handled closer to 1 Mt.

Importers split between paying up and waiting

The loss of Russian and Ukrainian supply is reshaping import patterns. Wheat exports from July to September were the lowest start to a trade-year quarter since 2012. The Middle East and North Africa, which usually absorb the most Russian and Ukrainian grain, saw the largest drop.

Behaviour varies by region.

• Turkey is importing less Russian wheat, with only a small offset from Romanian supply.
• Egypt, the world's largest wheat importer, shows a seasonal lag. It had a good domestic crop but remains import dependent, and it is waiting for lower prices.
• Indonesia is buying a larger volume of Argentine wheat earlier than usual, with harvest of Argentina’s crop supporting its export competitiveness.
• The EU and Argentina are picking up displaced demand. Baltic EU grain is moving to Sub-Saharan Africa, and French wheat is winning more North African business.

The US is close to import parity. The latest World Agricultural Supply and Demand Estimates (WASDE) cut 25 million bushels from the US export campaign, and a couple of Polish wheat shipments have reached the US. Price-sensitive buyers are rationing demand rather than switching origin, so Kpler estimates a slightly lower global wheat trade in 2026-27.

Southern Hemisphere supply adds competition. Australia is near 30 Mt despite El Niño, and Argentina is at 21 to 22 Mt, relatively large compared to the past five to 10 years.

In Russia, ex-farm prices are historically depressed, but alternatives to wheat are limited. Kpler analysts expect a small effect on planting, with spring weather mattering more for production.

Freight firms as bunker costs bite

Dry bulk earnings have risen through 2026. Panamax time charter earnings averaged near $18,500/day year-to-date, even after a recent dip. The Supramax equivalent has averaged just under $18,900/day over the same period. 

Panamaxes now carry around 60% of Australian coal, which competes with grain cargoes and lifts rates.

Fuel is the other driver. Very low sulphur fuel oil (VLSFO) at Singapore rose from $524 a tonne on 27 February to a peak of $1,140 on 10 March, in a sentiment-driven spike at the outbreak of the Middle East war. Prices have stayed well above pre-war levels. Kpler analysts expect tight fuel oil supply into 2027, because Gulf refineries remain down.

On US Gulf to China freight via the Panama Canal, the bunker element rose from just over $6 a tonne before the war to above $13 at the peak. It is now close to $11 a tonne. A reroute via the Cape of Good Hope would add more.

Vessel supply keeps a lid on owners. There are close to 260 Panamax ballasters in the Indian Ocean, against 170 a year ago and a five-year average of about 160. Many are heading to the Atlantic, probably in search of US cargo. Charterers may gain on hire rates, even as they pay more for fuel.

Close to 150 ballasting Supramaxes are in the Black Sea and Mediterranean region, ahead of last year. This points to tighter logistics and congestion, partly from recent attacks on shipping and Danube barging problems. A return to normal trading would not be quick, with tester shipments first.

Row crops: US corn burdened, soybeans tight

China is expected to buy 25 Mt of US soybeans and has bought above 11 Mt so far. Our balance sheet assumes the full volume. That should let the US avoid competing on price elsewhere, yet current prices suggest it still does.

Kpler estimates US soybean exports slightly above 50 Mt for 2026-27, with USDA lower, and ending stocks significantly below USDA. The May to July soybean spread is still in carry, and Kpler analysts highlight this could become inverted as stocks tighten. They remain bullish on the soybean to corn ratio. The ratio is at a high for the time of year, and fertiliser prices tilt next spring's planting further towards soybeans.

Corn is the opposite story. US sales lag last year, with Argentina and Brazil competing more strongly after two years of US dominance. Argentine corn sales are at a record, and sales for the coming year are the highest in five years. Kpler estimates US corn ending stocks slightly above 2 billion bushels, above the USDA’s latest forecast. Kpler’s estimate of 181 bu/ac for US yield, made before the latest WASDE, proved correct.

In South America, Mato Grosso grows about 30% of Brazilian soybeans and is around 60% planted, ahead of its seasonal pace. Forecasts show little dryness so far, but El Niño could challenge yields over the next two months. Argentina usually receives good rainfall in El Niño years.

Key watchpoints

• Trilateral talks between the US, Russia and Ukraine are due to start from 10 November. Russia has so far opposed a maritime ceasefire, and the outcome is a wait and see.
• Black Sea reopening. Our base case assumes no reopening. If it happens, Russian exports could reach 5 Mt in a month, Baltic and Black Sea combined.
• Winter conditions and wagon availability in the Baltic, plus Egypt and other North African buyers returning to the market.
• South American weather, especially rainfall in Mato Grosso, and the pace of US non-China soybean sales.

Demand rationing is doing much of the work in wheat, but importers cannot wait forever. One more spike in prices looks likely, though it is unlikely to last.

Watch the full Grains Fundamentals webinar on demand to hear the Kpler analysts walk through the live vessel data, importer shifts and South American weather outlook behind this analysis.