Key insights
- The USDA has reduced its U.S. winter wheat harvest outlook by 2% due to severe drought in the Plains, projecting the lowest hard red winter wheat production since 1957. This, coupled with rising fuel and fertilizer costs exacerbated by trade disruptions, puts further pressure on farmers. The poor crop condition rating (25% good-to-excellent) suggests potential headwinds for agricultural commodity prices and related input costs, which could indirectly impact consumer inflation and corporate earnings in the agribusiness sector.
By Karl Plume
CHICAGO, June 11 (Reuters) - The U.S. Department of Agriculture on Thursday cut its U.S. winter wheat crop outlook by 2% from a month earlier as a harsh drought in the Plains cut its hard red winter wheat production view to the lowest since 1957.
The USDA projected U.S. winter wheat production in the 2026/27 season at 1.030 billion bushels, down from its forecast of 1.048 billion last month and well below last year’s winter crop of 1.402 billion bushels. Production of hard red winter wheat, the largest variety grown in the United States, was projected to fall to 497 million bushels, down from an outlook for 515 million last month and well below last year’s 804-million-bushel crop.
The drop in production has heaped pressure on U.S. farmers already struggling with rising fuel and fertilizer prices due to the closure of the Strait of Hormuz and trade disruptions caused by U.S. President Donald Trump’s tariff battles.
The wheat harvest is underway in key wheat states including Kansas, Oklahoma and Texas, although some farmers, particularly in far western areas of the wheat belt, have found little to no grain to gather.
The USDA rated just 25% of the U.S. winter wheat crop in good-to-excellent condition in a weekly crop conditions report on Monday, the lowest for this time of year in USDA records dating to 1986.
AI computing powers are changing the stock market. Investing.com's ProPicks AI includes dozens of winning stock portfolios chosen by our advanced AI. Our flagship Tech Titans strategy doubled the S&P 500 within 18 months, including notable winners like Super Micro Computer (+185%) and AppLovin (+157%). Which stock will be the next to soar?