Wheat is no longer just following the winds of war. A “forever” drought is stirring up big trouble in the Southern Plains, threatening to slash hard red winter wheat production and sending futures soaring near two-year highs.
For months, moderate to extreme drought has gripped the prime HRW growing areas of western Kansas, eastern Colorado, and the Oklahoma and Texas panhandles. During April, weather forecasts frequently teased prospects for improved rainfall chances but typically disappointed. A brief mid-April cold snap that sent temperatures into the 20s further stoked concerns over crop damage.
As a result, USDA’s crop ratings sagged to historic lows. Analysts are sounding warnings of higher abandonment rates and a sharp drop in HRW production. In Kansas, the top wheat-producing state, over 40% of the crop was rated “poor” or “very poor” at the end of April.
“Most HRW-producing states are suffering from elevated crop stress,” said Tanner Ehmke, lead economist for grains and oilseeds at CoBank, in a late-April report. “As poor to very poor ratings climb, abandonment rates also typically follow.”
Look to upside
Wheat farmers with old-crop grain to sell or new-crop to hedge are seeing a much-improved pricing environment compared to just a few months ago, and the market may have further upside. As of May 1, July HRW wheat had rallied over $1.50, up 28% since the end of last year, and briefly neared $7.20 per bushel in late April.
May will be a critical month as to the question of how much, if any, additional price upside wheat prices may have. Any hint of rain relief for the Southern Plains could quickly squelch the rally and send prices tumbling. USDA’s May 12 Crop Production report, which will include the agency’s initial estimates for 2026-27 U.S. wheat production, looms as a key market influencer.
HRW farmers may abandon as much as 30% or more of the crop rather than bother to harvest it, Ehmke estimated. Kansas average yields could sink below 35 bushels per acre from 51 bpa in 2025. The overall drought impact may shrink the U.S. HRW crop to under 600 million bushels, down 25% from last year.
Where’s the global interest?
Recent market history suggests bulls have more room to run. July HRW futures established calendar-year highs during May in four of the past five years (2025 was the exception). In 2024, futures rallied from a mid-April low around $4.58 to a late-May peak at $7.46, a 31% surge over about six weeks. But as is often the case in wheat, the bull run wasn’t built to last: Within a month, the market erased the entire rally.
The usual bearish caveats that have bedeviled U.S. wheat in recent years apply: ample global supplies and stiff export competition. The April rally pushed U.S. wheat export values well above that of other top producers, including Russia. A tepid start to 2026-27 U.S. export sales underscores the harsh reality that even if U.S. crops come up short, the world’s importers can still shop around.