CBOT Wheat Prices Surge Amidst Drought-Related US Crop Rating Decline to 30-Year Low
US Wheat Futures Rise on USDA's Drought-Stricken Crop Report
Chicago, - The Chicago Board of Trade wheat futures rose on Tuesday after the US Department of Agriculture (USDA) released a report that lowered condition ratings for the nation's drought-hit crop to a 30-year low. The extreme dryness has ravaged crops in the US Plains, where farmers grow hard red winter wheat used to make bread.
The USDA rated 27% of the nation's winter wheat in good-to-excellent condition as of Sunday in a report issued after trading ended on Monday. This was down 1 percentage point from a week earlier and the lowest for this time of year since 1996. The decline in wheat condition has sparked concerns about the crop's potential yield and quality.
The CBOT July soft red winter wheat finished 2-3/4 cents higher at $6.67-1/4 per bushel. However, fund selling limited gains in grain and soy futures after the markets rallied on Monday on hopes of increased Chinese demand for American farm goods. Traders said on Tuesday that they were looking for more details on potential Chinese purchases.
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According to the White House, China has committed to buying at least $17 billion of US agricultural products in 2026, 2027, and 2028, following President Donald Trump's visit to Beijing last week. This pledge would take China's total US farm imports to around $28 billion to $30 billion a year, which is below the peak of $38 billion in 2022 but sharply above $8 billion last year and $24 billion in 2024.
Market watchers are optimistic about the purchase agreement and expect the Chinese government to lift the additional 10% levy on US farm exports to China soon.
| Market | Previous Close | Current Close | Change |
|---|---|---|---|
| CBOT July Soybean Futures | $12.12-3/4 | $12.09-1/2 | -3.5 cents |
| CBOT July Corn | $4.76-3/4 | $4.75-1/4 | -1.75 cents |
| CBOT July Soft Red Winter Wheat | $6.64-1/2 | $6.67-1/4 | +2.75 cents |
In other markets, the CBOT July soybean futures ended down 3-1/2 cents at $12.09-1/2 per bushel and July corn closed 1-3/4 cents lower at $4.75-1/4 per bushel.
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Investor Takeaway
US wheat crop conditions are deteriorating, potentially impacting global wheat prices.
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