Wheat Prices Plummet to 9-Month Lows Amid Surging Supplies and Favorable Harvest Forecasts

The wheat market is in a historic slump, with futures prices sinking to $5.25 per bushel—the lowest level in nine months—amid a confluence of factors signaling prolonged weakness. Favorable weather, record-high global stocks, and geopolitical trade dynamics have combined to push prices below the 16-year average, with further declines expected as the 2025 harvest approaches.

The Bearish Supply Picture

The USDA’s May 2025 report highlights a stark reality for wheat producers. U.S. production for the 2025/26 crop is projected at 1.896 billion bushels—a 3.8% decline from the previous year—due to reduced plantings. However, this drop has not tightened supplies; ending stocks remain near 845 million bushels, with global stocks hovering around 260 million metric tons. While dry conditions in regions like China and Russia could introduce volatility, the dominant trend points to oversupply.

Demand Under Pressure

Despite lower prices, demand has struggled to keep pace. U.S. wheat exports, though robust at 493,000 metric tons in early May, are insufficient to absorb the surplus. The stocks-to-use ratio for U.S. hard red winter (HRW) wheat—projected at 63%—is well above the 16-year average of 51%, indicating ample supply. Globally, the ratio remains near 34%, suggesting a balanced but not tight market.

Forward Contracts Signal Weakness Ahead

Producers are already feeling the pinch. Forward contracts for the 2025 harvest in key U.S. regions are trading $0.70 below the 15-year average, with prices as low as $4.95/bu in Weatherford, Oklahoma. These figures underscore market pessimism, as buyers anticipate ample supplies to flood the market post-harvest.

Analysts and Producers Adapt to the New Reality

Trade analysts surveyed by Dow Jones predict ending stocks for 2025/26 will remain near 848 million bushels, with global prices pressured by U.S. surplus conditions. Producers, meanwhile, face tough choices. Historically, selling during the June–August harvest window yields the highest prices, but this year’s outlook suggests prices will stay depressed. Advisors urge farmers to lock in forward contracts early and stagger sales to mitigate risks.

Conclusion: A Bear Market with Little Room to Rally

The USDA’s projections and market data paint a clear picture: wheat prices are in a prolonged slump. With futures prices already down 8.57% in 2025 and forecasts pointing to year-end lows of $483/bu, investors should brace for further declines. Even minor supply disruptions—like China’s dry conditions—will likely fail to offset the weight of surplus stocks and geopolitical trade dynamics.

For producers, the path forward is clear: prioritize cash flow by securing early contracts and avoid holding inventory through the harvest. In this environment, flexibility and discipline will be critical to weathering the storm of oversupply. The wheat market’s current trajectory suggests that, for now, the golden fields of plenty are anything but golden in value.