After a rocky September, market conditions for U.S. wheat producers were no kinder heading into October, as prices extended a steady march lower from three-year highs notched late this summer.
Is the market anywhere near a bottom? That’s an open question, but the recent trend has been clear. Amid sagging exports and slumping corn and soybean prices, wheat appears to have few bullish friends. Recent USDA data added pressure. But long-term upside potential remains. Here’s a brief rundown of recent market factors:
Exports have been dismal, with little benefit from Black Sea disruptions. In its Supply and Demand update Oct. 9, USDA lowered its estimate for 2026-27 U.S. wheat exports by 25 million bushels to 750 million bushels, down 17% from 2025-26 and the second-lowest annual total since 1971-72. Exports of hard red winter wheat have been particularly weak, with production shrinking to six-decade lows in the wake of last year’s Plains drought.
Wheat futures’ summer rally was driven in part by Russia-Ukraine hostilities that disrupted shipments out of the Black Sea, a key grain export hub. Those disruptions are ongoing, but the rally has largely unraveled, with few signs emerging that global importers are seeking alternative supplies from the U.S. As of late October, HRW and soft red winter wheat futures were down 17% to 18% from early-September peaks.
White wheat offers a bright spot amid farm price slippage. USDA also cut its average all-wheat price forecast by 10 cents to $6.30 per bushel for 2026-27, reflecting larger stocks and cash and futures expectations. Still, on the global markets, U.S. wheat is just too pricey for many buyers.
“Drought-tightened U.S. supplies remain uncompetitive against large crops from Canada, Australia and Argentina,” USDA analysts said in an October report. “Weaker export demand directly pressures farm-level prices and signals that HRW growers face an especially difficult marketing environment this year.”
Some other U.S. wheat classes are faring better. USDA boosted white wheat exports 5 million bushels to 225 million bushels, a six-year high, noting the variety remains the most price-competitive U.S. class. “Farmers growing white wheat, particularly in the Pacific Northwest, are better positioned than HRW producers this season,” USDA said.
Planting into drought continues. Winter wheat planting is getting caught up, but drought still lingers. After a slow start, winter wheat farmers are mostly caught up on fall seeding, with nearly two-thirds of the crop planted as of Oct. 18, USDA reported. Soil moisture has improved in several key growing areas, and notably in Kansas, following rains earlier this month. However, much of Oklahoma and the Texas Panhandle remained under moderate to extreme drought in mid-October.
Slightly half of the U.S. winter wheat production area was in drought earlier in October, USDA said. Plains weather will need to be monitored closely as winter approaches. About a year ago, HRW futures dropped to a five-year low, under $4.80, before drought contributed to a steep rally that sent prices briefly soaring above $8.50 in early September.
Russia could undercut supply cushion. USDA slightly reduced its forecast for global wheat stockpiles at the end of 2026-27, but recent price activity conveys little supply concern. Exporter-held stocks have been rising, especially in Russia, adding competitive pressure for the U.S., USDA said. But USDA also cut its estimate for Russia’s wheat exports for the second month in a row. The agency sees Russia’s shipments dropping 17% to a five-year low. The longer the war drags on, the greater the chances traders will return some risk premium to futures.