Wheat futures surged more than 5% to $6.57 per bushel, their highest level since June 2024, after new US government forecasts signaled a tighter supply outlook for the upcoming season. The USDA now projects total wheat production at 1.561 billion bushels, a decline of 424 million bushels from last year, reflecting both reduced planted area and weaker yields.
The USDA’s first survey-based estimate for 2026–2027 winter wheat output also pointed to a steep 25% year-on-year drop, led primarily by a sharp reduction in Hard Red Winter wheat production. At the same time, crop conditions deteriorated unexpectedly: the agency rated just 28% of the winter wheat crop as in good-to-excellent condition, down from 31% a week earlier and below market expectations. This is the poorest rating for this point in the season since 2022, heightening concerns that recent rainfall has not been sufficient to counter ongoing drought stress across the US Plains.
Wheat prices also drew additional support from energy markets, as oil prices climbed following comments by US President Donald Trump suggesting that the ceasefire with Iran remains fragile.