Wheat Rises on USDA Supply Cut

Wheat futures climbed back above $5.90 per bushel in mid-June, rebounding from a recent two-month low as concerns over US supply intensified following a fresh downgrade to the winter wheat outlook. The USDA cut its estimate for US winter wheat by 2% from a month earlier, with a severe Plains drought driving hard red winter wheat production to its lowest level since 1957. Crop conditions also deteriorated, with only 25% of the crop rated good-to-excellent — the weakest reading on record for this time of year. This decline in US output has tightened supply expectations even as harvest activity begins across major producing states such as Kansas, Oklahoma, and Texas. El Niño-related weather risks continued to support prices, heightening the likelihood of droughts, floods, and extreme temperatures in key global growing regions. The drop in production has further strained US farmers already contending with higher fuel and fertilizer costs, exacerbated by disruptions in the Strait of Hormuz and trade tensions linked to US tariff measures.