The old saying "nothing cures low prices like low prices" certainly has held true again this spring with the added help from extreme drought, multiple frost events, a surprising indefinite closure of the Strait of Hormuz, and now a developing super El Nino event. Kansas wheat futures have led the price charge with the July contract reaching $7.50/bushel overnight after starting 2026 under $5.40/bushel.

The latest catalyst was Tuesday's World Agricultural Supply and Demand Estimate (WASDE) update. It shocked the trade with 2026-27 total wheat production estimated to be only 1.561 billion bushels (bb) versus 1.985 bb last year and 1.979 bb in 2024-25. If realized, total U.S. wheat production is projected to fall to the lowest level seen since 1972 (in green on the accompanying chart). That was much lower than the average pre-report estimate of 1.735 bb and resulted in an ending stocks projection also coming out below expectations.

It's worth recalling that a miss in the all-wheat planting intentions report set the stage for the production shortfall, with the March 31 total coming in at 43.775 million acres compared to pre-report estimates of 44.786 million acres and last year's 45.328 million acres. If realized, that will mark the lowest total wheat area in the U.S. since 1919. And again, proving that nothing cures low prices like low prices.

Ending stocks in the U.S. for 2026-27 are forecast to fall to 762 million bushels (mb) as a result, compared to pre-report estimates of 833 mb, last year's current projection of 935 mb and 2024-25 ending stocks of 855 mb.

Even then, year-end supplies would have been tighter if import estimates hadn't been increased to 140 mb for the 2026-27 crop year compared to 125 mb last year by USDA. Exports were also curtailed with the current projection falling to 775 mb compared to 910 mb last year and 826 mb in 2024-25.

Where it gets even more interesting is when the global picture is considered. Most importantly, major exporting countries (Argentina, Australia, Canada, EU, Russia and Ukraine) are expected to produce a combined 32.28 million metric tons (mmt) less wheat than they did last year. USDA expects that will result in a 7 mmt decline in exports by the combined group, at a time when U.S. exports are also expected to fall (leaving the latter even more questionable).

Most noteworthy, Australian production is currently expected to fall to 30 mmt from 36 mmt last year and 34.11 mmt in 2024-25. That may still be overly optimistic given the Super El Nino event currently developing that traditionally can decimate their wheat crop. As recently as 2019, they produced less than 15 mmt of wheat thanks to an El Nino episode at the time. Despite that, USDA is currently forecasting their exports will only fall from 26 mmt last year to 23 mmt in 2026-27, but that may be too optimistic. Especially given their issues with fertilizer and fuel supplies thanks to the prolonged closure of the Strait of Hormuz.

For Canada, USDA estimated the 2026-27 crop at 35 mmt (compared to AAFC at 35.014 mmt), down from 39.96 mmt last year and 35.94 mmt in 2024-25. USDA also expects exports to fall from 30 mmt to 28 mmt in the coming year.

I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.

Mitch Miller can be reached at mitchmiller.dtn@gmail.com

Follow him on social platform X @mgreymiller

(c) Copyright 2026 DTN, LLC. All rights reserved.