Wheat Futures Soar Amid Drought and Supply Chain Disruptions

Wheat futures have surged to their strongest rally in over a year, driven by tight supplies and drought concerns. Chicago wheat has climbed nearly 16% in July to trade near $7 per bushel, the highest price since May 2024.

Kansas City hard red winter wheat has reached its best spot price since August 2023 due to production challenges. The USDA forecasts a stark picture for American wheat growers, projecting 2026 all-wheat production at 1.536 billion bushels, marking the smallest U.S. wheat crop in more than 50 years.

Hard red winter wheat bore the brunt of losses at 471 million bushels, down 41% from last year after severe drought gripped the southern plains. Global supplies are tightening simultaneously as Russia restricted commercial shipping through the Kerch Strait and Ukraine lost nearly a third of its Black Sea export capacity.