US wheat farmers are facing significant concerns over potential yield reductions as a severe heatwave and dry conditions impact their crops. This comes as wheat prices are surging, driven by factors such as the ongoing Russia-Ukraine war, which has led to attacks on grain ports and vessels, and a developing El Niño pattern expected to adversely affect global wheat production. The U.S. Department of Agriculture has already projected a substantial drop in hard red winter wheat output for 2026-27, from 804 million bushels to 471 million bushels, contributing to an overall 22.6% decline in the total U.S. wheat harvest compared to the previous year, down to 1.54 billion bushels. The total planted area for U.S. wheat in 2026/27, at 42.7 million acres, represents the lowest seeded area since 1972.
The widespread heat and dryness are causing a "weather premium" in the market, with analysts like Lilja noting that yields are expected to decline. Reports from the annual spring wheat tour projected yields in North Dakota at 46 bushels per acre, four less than in 2025/26. Soil moisture has rapidly fallen across the North-Central states, including the Dakotas, Nebraska, Minnesota, western Iowa, and Wisconsin, leading to concerns about expanding drought conditions. While some cooler temperatures and scattered showers are expected in parts of the Corn Belt, the overall impact of the mid-July heatwave is still unfolding.
Prices for various commodities have seen significant increases. As of July 22, September Kansas hard red wheat was up 30.25 cents at $7.3325/bu, September Chicago soft red wheat climbed 13.75 cents at $7.075/bu, and September Minneapolis spring wheat advanced 23.5 cents at $7.29/bu. Corn and soybean markets have also posted stronger weekly closes, with August soybeans jumping 30.5 cents at $12.33 per bushel and September corn improving 14.5 cents at $4.62/bu. Beyond domestic issues, global declines in wheat production are also contributing, with France dealing with severe drought and Australia facing drought in its western region, compounded by high fertilizer costs.
