2025 Wheat Insights

Note Written on February 26, 2025

According to the latest WASDE report from February 2025, wheat production in the US has been on the decline, but it seems to be leveling off now. Last year's beginning stocks were at 570 million bushels, whereas this year’s crop starts with 696 million bushels. Interestingly, even with less planted acreage this year, US production is expected to increase by 167 million bushels compared to last year. How? Well, they’re betting on more acres getting harvested this year, unlike last year when a lot of fields went unharvested due to drought and other factors. This should bring the harvested-to-planted acreage ratio back to normal. 

On a global scale, wheat production is expected to be approximately 2 million metric tons less than last year. But here’s the kicker: world ending stocks are anticipated to drop by almost 12.5 million metric tons compared to last year, thanks to lower production and beginning stocks. 

So, what does this mean for US wheat prices? That’s the million-dollar question for our customers. The current premium in the wheat market is mostly due to weather concerns. We need harvested acres to be on par with or above average, and yields need to be strong across those acres. 

As our farmers know, weather can be unpredictable from now until harvest. Another wild card is how many acres will get grazed or hayed given the record-high cattle prices. To compete for harvested acreage, we need to factor in weather variability, since we’re bound to face hail or drought in some areas. 

Yes, US production is projected to rise, but global production and ending stocks are expected to fall. Wheat prices will ultimately depend on several factors, but we believe the key ones are harvested acreage and yield. While it may seem obvious, this explains the recent price rally. It’ll take some time to see if we get the necessary acres harvested and favorable weather for a good crop. Remember last year? Prices surged due to crop uncertainty, only to drop once the market realized our crop was in good shape.