Wheat

Wheat updates

Wheat conditions improve domestically, but exports face competition.

Winter wheat crop conditions have improved. Despite a weak start, 55% of U.S. winter wheat was in good to excellent condition as of November 24, the highest level in the past five years. Better conditions are driven by significant improvement in drought conditions across the nation. Most major wheat-producing areas experienced substantial recovery over the past month. To illustrate, on October 29, around 65% of winter wheat production areas were affected by drought. This figure dropped to 29% by December 3.

Wheat conditions are also improving globally. Despite USDA projecting a smaller crop and lower exports, Russian exports are still expected to be the third largest ever, supported by the Russian ruble falling to record lows. The Black Sea region continues to offer the most heavily discounted wheat among major exporters. In South America, Argentina is forecasted to have a larger than expected crop this year due to improvements in yields. Export markets are eagerly awaiting this crop, and China is negotiating with Argentina for their first major wheat purchase from that nation in over 25 years. This development does not bode well for U.S. wheat exports, which are also facing a strengthening U.S. dollar.

U.S. growers are cautiously optimistic about a strong 2025 crop, but pricing remains a concern. As markets continue to adjust to average levels, nearly three years after the initial highs in 2022 following Russia’s invasion of Ukraine, prices are expected to be lower in 2025.

Profitability

December 11, 2024

Wheat: Breakeven profitability - Bearish 12-month outlook

Global export competition and a strengthening U.S. dollar will create headwinds for wheat growers. While bearish price signals add to these headwinds, winter wheat conditions are improving as drought eases.

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