Wheat surges on CBOT after US-China trade deal and tightening global supply outlook

Wheat futures exploded higher on Monday, May 18, after the Trump administration announced that China had agreed to purchase $17 billion worth of US agricultural goods through 2028, reigniting a demand narrative that had largely been absent from grain markets since the tariff escalations of late 2025. Chicago Board of Trade July soft red winter wheat futures settled at $6.64½/bu ($244.16/t), up 28¾ cents on the session. September contracts followed, rising 28 cents to $6.77¾/bu. (Source: UkrAgroConsult, May 19, 2026; Reuters, May 19, 2026)

Kansas City July hard red winter wheat futures climbed to $7.03¾/bu ($258.58/t), gaining 15¾ cents, while Minneapolis spring wheat futures added 18 cents to finish at $7.03¼/bu. The rally rippled through global markets: Euronext MATIF milling wheat futures in Paris rose to €213.25/t, tracking Chicago higher. (Source: UkrAgroConsult, May 19, 2026; TradingView/Reuters, May 12, 2026)

The price action sits on top of a fundamentally constructive supply picture. The USDA's May 12 World Agricultural Supply and Demand Estimates (WASDE) report — the first survey-based production forecast for the 2026/27 US winter wheat crop — revealed that winter wheat production would fall 25% year-on-year to 1,048 million bushels, the smallest since 1965/66. All US wheat production is now projected at 1.561 billion bushels, down 424 million bushels from 2025/26, driven by sharply reduced harvested area and lower yields across all wheat classes. (Source: USDA WASDE, May 12, 2026; Barchart, May 13, 2026)

US ending stocks for 2026/27 are projected to fall 18% to 762 million bushels, and the season-average farm price is forecast at $6.50/bu, up $1.50 from the prior year. Globally, the picture is similarly tightening. World wheat production for 2026/27 is forecast down by 24.8 million tonnes from last year's record, though it remains the second-highest on record. The USDA projects global ending stocks at 275 million tonnes, 4.2 million tonnes lower than 2025/26 and below average trade estimates by 5.5 million tonnes. (Source: USDA WASDE, May 12, 2026; Agriland, May 19, 2026; RFD TV, May 20, 2026)

Export sales data from the week of May 14 confirmed the strengthening demand picture: 166,342 tonnes of old-crop wheat were sold, a three-week high and well above the net cancellations from the same week last year. Japan was the largest buyer at 98,300 tonnes, with 60,000 tonnes sold to Panama. New-crop (2026/27) sales reached 130,488 tonnes. US export inspections for the week ending May 14 totalled 223,972 tonnes. (Source: Barchart, May 16, 2026)

In the Black Sea region, the supply dynamic adds another layer. Russia's wheat exports for 2025/26 are estimated at around 44 million tonnes, a 20% decline from the 2023/24 record, as adverse weather reduced harvests in key producing regions. Meanwhile, Ukraine is expected to produce 22.7 million tonnes of wheat in 2026/27 (down 5% YoY) but export 15.5 million tonnes (+19%), supported by large carryover stocks that have swelled to nearly 13 million tonnes from constrained exports in the current season due to EU quotas and Russian attacks on infrastructure. (Source: CSIS, April 27, 2026; UkrAgroConsult, May 1, 2026)

The tightening supply and strengthening demand backdrop has shifted market sentiment decisively. The WASDE data came in well below average trade expectations for both US and global ending stocks, forcing a meaningful upward revision to price forecasts. With the smallest US winter wheat crop in six decades and global inventories declining for a second consecutive season, the wheat market enters the northern hemisphere harvest with a bullish structural foundation that the US-China trade deal has only reinforced.