US Wheat Prices Surge to Near 2-Year High Amid Drought Concerns

The price of the main US wheat variety has climbed to its highest level in nearly two years, driven by growing concerns over crop conditions as about 70 percent of planted areas face drought.

According to Bloomberg, the price of hard red winter wheat, commonly used in bread production, rose by 1.1 percent, bringing its total weekly gains to nearly 6 percent and marking its highest level since June 2024.

This type of wheat is primarily grown across the US Plains, where there is increasing consensus that prolonged drought has already caused significant damage to crops.

The price surge comes at a time when global food inflation risks are rising, fueled by adverse weather conditions in several regions and higher fertilizer and fuel costs linked to geopolitical tensions.

The Bloomberg Agriculture Spot Index, which tracks 10 agricultural products including hard red wheat, has reached its highest level in a year.

A report by Hightower Report noted that traders are beginning to recognize that crop damage is unlikely to be reversed and that lower yields are becoming inevitable despite the possibility of rainfall.

Recent data from the United States Department of Agriculture showed that only 30 percent of winter wheat crops are rated good or excellent, down from 34 percent the previous week and 45 percent a year ago.

Meanwhile, the National Drought Mitigation Center reported that 70 percent of winter wheat areas were affected by drought as of April 21, up from 50 percent in late February.

The Kansas Wheat Commission emphasized that March and April are critical months for wheat development, warning that lack of moisture accelerates crop growth in a way that reduces grain filling time. This can result in smaller grains, lower weight, and, in severe cases, empty heads.

Hard red wheat prices are now trading at a premium of 62 cents per bushel over soft red wheat, the widest gap in about two and a half years. While hard red wheat rose 0.3 percent to 6.815 dollars per bushel, soft red wheat fell 0.1 percent to 6.195 dollars per bushel.

Corn prices showed little change, while soybean prices recorded a slight decline.