Wheat Prices Soar on Tight Supplies and Drought Worries

Wheat futures have been surging on tight supplies and drought concerns. The price of Chicago wheat has climbed nearly 16% in July to trade near $7 per bushel, its highest level since May 2024.

The production challenges facing American wheat growers are stark according to the USDA's latest forecasts. All-wheat production is projected at 1.536 billion bushels for 2026, marking the smallest U.S. crop in over 50 years. Hard red winter wheat bore the brunt of losses at 471 million bushels, down 41% from last year due to severe drought in the southern plains.

Global supplies are also tightening as Russia restricts commercial shipping through the Kerch Strait following Ukrainian attacks on vessels. Ukraine lost nearly a third of its Black Sea export capacity while European production faces its own crisis with heat waves cutting forecasts by more than 9% - potentially the largest drop in two decades.