India’s 2026 monsoon staged a significant recovery during July, but the improvement may have come too late to fully repair the damage caused by a dry and erratic start to the growing season. Now, strengthening El Niño conditions threaten to turn the weather pattern drier again during a critical portion of the country’s crop-development window.
According to an August 10 USDA Foreign Agricultural Service (FAS) report from its Mumbai office, India’s total Kharif crop area stood at 78.74 million hectares as of July 24, down 3.88 million hectares, or 4.7%, from last year. That acreage deficit translates to approximately 9.59 million acres. The planting figures cited by USDA FAS originate from India’s Ministry of Agriculture and Farmers’ Welfare.
The concern is no longer simply how much rain India has received. The bigger question is whether the improved July rainfall can overcome delayed planting, reduced acreage, depleted reservoir supplies and a potentially hotter and drier finish to the monsoon season.
July Rainfall Improved — But the Damage Was Already Done
According to data from the India Meteorological Department (IMD), cited by USDA FAS, India’s southwest monsoon got off to an unusually poor start. June rainfall totaled just 106.8 millimeters compared with a normal 165.3 millimeters, creating a nationwide deficit of 35.4%.
Conditions improved dramatically in July. Nationwide rainfall reached 283.3 millimeters versus a normal 280.5 millimeters, putting the month approximately 1% above normal.
That recovery narrowed India’s cumulative June 1-August 1 rainfall deficit to 11.5% below the long-period average, with 402.2 millimeters received compared with a normal 454.7 millimeters.
The national figure, however, masks substantial regional differences. IMD data showed Northwest India remained 12.5% below normal, East and Northeast India 29.4% below normal, and the South Peninsula 21.6% below normal. Central India was the exception at 6.1% above normal.
In other words, July helped stabilize the situation, but rainfall distribution remains far from uniform.
El Niño Becomes the Next Major Risk
This is where the latest outlook becomes particularly important for agricultural markets.
The India Meteorological Department forecasts nationwide rainfall during August and September at less than 94% of the long-period average, according to USDA FAS. August rainfall is similarly projected at less than 94% of its monthly average.
IMD also expects warmer-than-normal maximum temperatures nationwide.
According to the USDA FAS report, these warmer and drier conditions are primarily associated with moderate El Niño conditions in the equatorial Pacific that are expected to strengthen through the remainder of the monsoon season. A potentially positive Indian Ocean Dipole developing in September could provide some relief.
That creates an important transition for the market to watch: India has gone from worrying about whether the monsoon would recover to whether El Niño will allow that recovery to continue.
India Is Nearly 10 Million Acres Behind Last Year
The consequences of the poor start are already visible in India’s acreage numbers.
Data from India’s Ministry of Agriculture and Farmers’ Welfare, as reported by USDA FAS, showed total Kharif planting at 78.74 million hectares, or roughly 194.6 million acres, compared with 82.62 million hectares, or approximately 204.2 million acres, at the same point in 2025.
That leaves planting 3.88 million hectares — approximately 9.6 million acres — behind last year.
Coarse cereals: 14.22 million hectares, down 11.94%
Pulses: 8.46 million hectares, down 7.54%
Cotton: 9.87 million hectares, down 3.88%
Rice: 23.44 million hectares, down 2.57%
Oilseeds: 16.35 million hectares, down 2.07%
Coarse Grains Take the Biggest Hit
The largest acreage decline is occurring in India’s coarse grain sector, where planted area has fallen to 14.22 million hectares (35.1 million acres), down from 16.15 million hectares (39.9 million acres) last year. That represents a decline of 1.93 million hectares, or approximately 4.77 million acres — an 11.94% year-over-year reduction.
Two crops account for a substantial portion of that decline. Maize acreage is down 840,000 hectares, equivalent to roughly 2.08 million acres, while bajra acreage is down another 850,000 hectares, or approximately 2.10 million acres. Combined, those two crops account for roughly 4.2 million acres of lost planting, or nearly 88% of the overall coarse-grain acreage decline reported so far.
USDA FAS ties the contraction directly to the delayed monsoon onset and early-season soil moisture deficits across India’s rainfed production regions. Rajasthan was particularly affected, with total planted acreage falling 1.15 million hectares (2.84 million acres) as farmers delayed coarse millet planting while waiting for adequate moisture.
The maize decline deserves particular attention from grain markets. Unlike the broader coarse-cereal category, maize has direct implications for India’s feed and industrial grain balance. However, the FAS report does not provide an updated maize production estimate or quantify how much the acreage decline could ultimately reduce production. At this stage, the acreage numbers should therefore be viewed as an indication of increased production risk rather than confirmation of a smaller crop.
That risk becomes more important given the weather outlook. July’s improved rainfall helped replenish soil moisture, but the India Meteorological Department now expects below-normal rainfall and warmer-than-normal temperatures during the second half of the monsoon, with strengthening El Niño conditions cited as the primary driver.
For coarse grains, that creates a two-part concern: fewer acres were planted following the poor start to the monsoon, and the remaining crop now faces the possibility of a less favorable finish. Whether improving July moisture can offset those acreage losses will be one of the more important pieces of India’s crop outlook to monitor through August and September.
Reservoir Levels Provide Less Cushion
India also enters this potentially drier period with water reserves well below last year’s levels.
According to India’s Central Water Commission, cited by USDA FAS, the country’s 166 major reservoirs held 81.479 billion cubic meters of live storage as of July 30, representing 44.39% of total capacity.
More importantly, storage was only 65.37% of last year’s level and 92.99% of normal for the corresponding period. Reservoir storage across every major region remained below year-ago levels.
That leaves less of a buffer if August and September rainfall disappoint.
Low Reservoirs Could Carry El Niño Risk Into India’s Rabi Season
The implications of a disappointing finish to India’s monsoon may extend well beyond the crops currently in the field. India’s Rabi season begins following the southwest monsoon, with crops generally planted from October through December and harvested from March into April. Major Rabi crops include wheat, chickpeas, mustard, lentils, peas and barley, and production is concentrated heavily in irrigated areas.
That makes the amount of water India receives from the southwest monsoon particularly important.
Wheat May Be the Bigger Market Risk
The potential impact of a disappointing finish to India’s monsoon extends beyond the Kharif crops currently in the field. India’s upcoming 2026/27 Rabi wheat crop may ultimately be one of the more important markets to watch, particularly given the size of the crop already built into USDA’s global wheat balance sheet.
USDA currently projects India’s 2026/27 wheat production at 121 million metric tons (MMT). If achieved, that would represent a record crop, surpassing USDA’s current estimate of 117.95 MMT for 2025/26 and continuing a string of historically large Indian wheat harvests. Earlier this spring, USDA FAS described even its then-120 MMT projection as putting India on pace for a fourth consecutive record wheat harvest.
The size of that assumption matters globally. At 121 MMT, India is projected to be the world’s third-largest wheat producer, trailing only China at 141 MMT and the European Union at 136 MMT. India would account for nearly 15% of USDA’s projected 820 MMT of global wheat production.
That is a substantial crop to ask for, particularly if India’s water situation does not improve before the Rabi planting season begins.
Wheat is planted primarily after the southwest monsoon, making the amount of water carried out of the summer rainy season an important part of the production setup. The monsoon helps replenish reservoirs, soil moisture and groundwater supplies that support irrigation during the subsequent Rabi growing season.
As of July 30, however, India’s 166 major reservoirs contained 81.479 billion cubic meters of live storage, equal to just 44.39% of capacity. More importantly, storage stood at only 65.37% of last year’s level and 92.99% of normal, with every major region holding less water than a year ago.
That makes the remaining August and September monsoon increasingly important. The India Meteorological Department currently forecasts rainfall during the second half of the monsoon at less than 94% of the long-period average, while moderate El Niño conditions are expected to strengthen through the remainder of the season.
This does not mean India’s wheat crop is destined to fall short of USDA’s 121 MMT projection. There is still time for reservoir levels and soil-moisture conditions to improve, and USDA’s record forecast also reflects expectations for very large wheat area. But the margin for error becomes more important when the global balance sheet is already assuming the largest Indian wheat crop on record.
From a market perspective, that gives us another reason to closely monitor India’s rainfall through the end of September. The immediate story is the nearly 10-million-acre shortfall in Kharif planting, but the longer-term question may be whether India exits the monsoon with enough water available to support the record 121 MMT wheat crop USDA currently has penciled into the 2026/27 world balance sheet.
If reservoir levels fail to recover before Rabi planting begins, that 121 MMT assumption could become an increasingly important number for the global wheat market to scrutinize.
If India’s reservoirs fail to recover meaningfully before the monsoon ends, the market’s attention may need to shift from lost Kharif acreage toward the water available for India’s 2026/27 Rabi crop.
What Does This Mean for Agricultural Markets?
The USDA FAS report does not forecast a major Indian crop failure, and we should be careful not to make that leap, but the USDA WASDE is clearly relying heavily on India overperforming in the months to come. Record wheat production is a very big ask as we roll into a very strong El Niño.
July rainfall was beneficial and substantially improved conditions following the poor June start. However, the combination of acreage losses, planting delays, below-year-ago reservoir storage, and a strengthening El Niño creates additional production risk heading into the second half of the monsoon.
The numbers are significant: total Kharif acreage is down 4.7%, coarse cereal acreage is down nearly 12%, and maize area is approximately 2.1 million acres below last year. Meanwhile, IMD expects below-normal August-September rainfall as El Niño strengthens.
For grain and oilseed markets, India’s weather therefore deserves attention through August and September.
July’s rainfall recovery bought India’s crops some time. The question now is whether it arrived soon enough — and whether strengthening El Niño conditions will allow those crops to finish.
