Wheat was set for its biggest weekly gain in almost two months, as persistent weather concerns and tighter fertilizer supplies linked to the Iran war stoked worries over the crop’s supply outlook.
The most active wheat contracts in Chicago were on track to climb around 5% on the week, their biggest such jump since February. The hard red winter variety hovered near its highest level since June 2024.
Drought conditions were expected to linger in key areas of the US Great Plains, while in Australia, a shortage of farm inputs and persistent dryness weighed on wheat acreage in the major producer and exporter.
Much of wheat’s gains have been led by the hard red variety, “a proxy for US drought concerns,” said Mike Verdin, senior markets consultant at CRM AgriCommodities.
The proportion of US winter wheat area in drought held at 68% last week, according to data from the US Department of Agriculture earlier this week. Dry weather also continued in parts of the Black Sea growing region and some areas of Europe, impacting wheat’s supply outlook in some of the world’s top producing regions, according to the latest forecasts from Vaisala XWeather.
Fertilizer supply worries, especially for southern winter crops like those in Australia, and an impending El Nino have also helped boost prices, said Tobin Gorey, a strategist at Cornucopia Agri Analytics. The bullish run could have limits given ample global supplies, Gorey said.
Still, any potential crop issues in Australia and Argentina could provide a catalyst for more price gains later, he added.
Planting acreage for the 2026/27 wheat crop in Australia is expected to fall to a seven-year low, according to a Bloomberg survey, as weak prices and fertilizer and fuel shortages weigh on harvest prospects.
US President Donald Trump said America and Iran could clinch a permanent ceasefire, striking a positive tone for a possible end to the conflict now nearing the end of its seventh week. However, the Strait of Hormuz remains largely closed, prolonging an energy and fertilizer crisis and threatening production of key crops worldwide.
Palm oil futures traded on Bursa Malaysia Derivatives were down, as weak demand from India and a closed Middle East market continue to weigh on prices.
