Wheat Futures Fall from 2-Year High

Wheat futures fell more than 3% to around $6.5 per bushel, down from a two-year high of $6.8 reached on May 12, as traders took profits and reacted to the lack of new agricultural details from the US-China summit. Markets were disappointed that the first day of talks did not bring any concrete updates on grain trade. Attention also shifted back to fundamentals, including weather and supply concerns in the United States. Drought conditions have worsened in parts of Nebraska and Oklahoma, which is affecting winter wheat and newly planted corn and soybeans, even as some rainfall is expected in other growing areas. Crop scouts in Kansas also reported lower than expected yields for hard red winter wheat, estimating 39.3 bushels per acre compared with 53.3 last year. The USDA has also projected US wheat production at 1.561 billion bushels, the lowest level since 1972, highlighting ongoing supply pressure linked to dry conditions in the Great Plains.

Wheat futures hovered around $6.60 per bushel, holding near their highest level since June 2024 after US government forecasts signaled a tighter supply outlook for the upcoming season. The USDA projected all wheat production at 1,561 million bushels, down 424 million from last year due to lower acreage and weaker yields. The first survey based estimate for 2026 to 2027 winter wheat output also showed a sharp drop of 25%, driven mainly by reduced Hard Red Winter production. Crop conditions also deteriorated unexpectedly, with the USDA rating 28% of winter wheat as good to excellent, down from 31% the previous week and below analyst expectations. This is the weakest reading for this time of year since 2022, reinforcing concerns that recent rainfall has not been enough to offset drought stress in US Plains regions. Additional support came from energy markets, where oil prices rose after comments from US President Donald Trump that the Iran ceasefire remains fragile.

Wheat increased to 661.75 USd/Bu, the highest since June 2024. Over the past 4 weeks, Wheat gained 12.98%, and in the last 12 months, it increased 27.18%.