Smallest U.S. Wheat Crop Since 1970 Headlines a Data-Heavy Day at USDA
July Crop Production pegs drought-battered winter wheat at 990 million bushels — down 29% from 2025 — while the companion WASDE tightens corn and wheat balance sheets, boosts soybean exports and slashes the rice outlook. Farm prices, for now, barely budge
USDA delivered a one-two punch of supply-side news Friday, releasing the July Crop Production report from the National Agricultural Statistics Service alongside the World Agricultural Supply and Demand Estimates from the World Agricultural Outlook Board. The headline belongs to wheat: total U.S. production for 2026/27 is now forecast at 1.536 billion bushels, which USDA notes would be the smallest all-wheat crop since 1970/71. Yet the day’s fine print carried just as much freight for markets — a 170-million-bushel cut to projected corn ending stocks, a larger soybean crop absorbed entirely by stronger exports, a dramatic 28% drawdown in rice stocks, and a citrus sector finally showing signs of life.
Winter Wheat: A Harvest Decades in the Making — for the Wrong Reasons
NASS forecast winter wheat production at 990 million bushels, down 4% from the June 1 forecast and down 29% from 2025. The crop falls below the 1-billion-bushel mark for the first time in more than a decade, and the yield story is just as stark: at 46.7 bushels per acre, down 0.1 bushel from last month and a stunning 8.2 bushels below last year’s 54.9, the national yield would be the lowest since 2015. The collapse is concentrated where drought bit hardest and longest. Kansas, the nation’s top producer, is forecast at 196.4 million bushels — down 43% from last year — on a 33-bushel yield that fell another 5.7% just since June. Oklahoma is off 45% from 2025 at 58.8 million bushels, Texas is down 24% percent, Colorado’s 19-bushel yield is fully half of last year’s, and Nebraska’s yield is down 38%. Abandonment tells the same story: harvested area of 21.2 million acres is down nearly 17% from last year against a planted-area decline of only 5%.
The crop’s fate was sealed by ratings that never recovered. The final condition score before harvest showed just 26 % of the crop rated good to excellent — 22 percentage points below a year ago — with 47% rated very poor to poor. As the report’s weather summary puts it bluntly, June’s generous rains across the southern Plains ‘arrived too late to benefit winter wheat.’ Nebraska ended the season with 93% of its crop rated very poor to poor.
Winter wheat condition ratings ran 20-plus points below every recent year from early April onward. (Source: USDA NASS, July 2026 ASB briefing)
By class, the damage is heaviest in Hard Red Winter — the bread-wheat backbone of the Plains — at 471 million bushels, down 5% from last month and 41% from last year. Soft Red Winter, at 287 million bushels, is down 19% from 2025, while White Winter held nearly steady at 232 million. Not everything wilted: NASS forecasts record-high yields in Illinois and Michigan, and Washington’s yield is actually up 1.5%t, a reminder that this is a Plains drought story rather than a national one.
At 990 million bushels, the 2026 winter wheat crop breaks below a decade-long range. (Source: USDA NASS)
Year-over-year yield declines of 20 to 50 percent blanket the central and southern Plains. (Source: USDA NASS)
Spring wheat offers only partial consolation. The first survey-based forecast puts other-spring production at 475 million bushels, down 4% from last year on reduced acreage, though the 52.3-bushel yield would be the second highest on record behind 2024 and conditions in the northern Plains are running ahead of last year, with 59% rated good to excellent versus 53 a year ago. Durum is forecast at 70.9 million bushels, down 18%, on a 16% cut in harvested area. Notably, NASS’s spring wheat number came in above nearly every pre-report industry expectation, while the winter wheat figure landed within the tight range analysts had converged on after June’s declines.
The trade chased NASS lower all spring: analyst expectations that began near 1.2 billion bushels in May converged on the 990-million-bushel July estimate. (Source: USDA NASS)
WASDE Wheat: Tighter at Home, Looser Abroad — and a Flat Price
The WASDE translated the production cut into a 22-million-bushel reduction in 2026/27 wheat ending stocks, now 722 million bushels — down 22% from last year. Supplies fell on both smaller beginning stocks and the lower crop, while domestic use and exports were left unchanged at 1.099 billion and 775 million bushels, respectively. Even so, the board held the season-average farm price at $6.00 per bushel, up from last year’s $5.06 but unmoved on the month. The restraint reflects the global board: world production was raised for Russia and Ukraine on continued favorable winter wheat conditions, world trade was bumped 1.1 million tons higher on bigger exports from Argentina, Russia and Ukraine, and global ending stocks of 272.8 million tons — while down 2.6 million from June — remain ample enough to cap rallies. For U.S. producers, the tension is now explicit: the tightest domestic wheat balance sheet in years is competing against an export market where the price-setters just got bigger crops.
Corn: The Quiet Bull Case in the Feed Bunk
Corn’s changes were less flashy than wheat’s but arguably more consequential for price direction. The June 30 Grain Stocks report forced USDA to raise 2025/26 feed and residual use by 150 million bushels — disappearance through the first three quarters of the marketing year topped 5.6 billion bushels, versus roughly 4.8 billion in the same period a year ago — partially offset by a 25-million-bushel cut to corn-for-ethanol. The net effect slices new-crop beginning stocks by 125 million bushels to 2.0 billion. On the new-crop ledger, production edged up fractionally to 16.0 billion bushels on the June Acreage report’s area, with the yield held at a weather-adjusted trend of 183.0 bushels per acre. Exports were raised 50 million bushels to 3.2 billion on continued global demand strength. Put together, 2026/27 ending stocks dropped 170 million bushels to 1.79 billion — a stocks-to-use ratio near 11% — yet the farm price was left at $4.40 per bushel.
The analytical takeaway is that demand is doing the heavy lifting. With two-thirds of the corn crop rated good to excellent (six points behind last year, but broadly healthy) and the trend yield still penciled in, the August 12 Crop Production report — the first with survey-based corn and soybean yields — becomes the market’s next genuine test. A 183-bushel national yield on 87.4 million harvested acres leaves little margin: shave a few bushels off in August and the balance sheet tightens quickly from an already-reduced base. The world picture leans the same direction, with global corn stocks cut 6.0 million tons to 275.3 million, driven by a French crop devastated by record June heat — the smallest there in more than three decades, per the report — along with reductions for Hungary and drought-hit Kenya.
Sorghum, Barley and Oats: Rounding Out the Feed Grains
Sorghum was a quiet beneficiary of the June Acreage report. Today’s Crop Production did not re-survey the crop, but the WASDE raised 2026/27 production 13 million bushels to 380 million on the larger area — 6.3 million acres planted, 5.5 million for harvest — with the yield assumption at 69.3 bushels per acre, the 2006-2025 median. Even so, the crop would be down 13% from last year’s 437 million bushels. USDA absorbed part of the bigger supply by raising food, seed and industrial use 10 million bushels to 105 million, leaving ending stocks at 37 million — up 3 million from June and dead even with the year-ago carryout — and the farm price unchanged at $4.10 per bushel, a healthy step up from 2025/26’s $3.55. The crop is off to a brisk start, 97% planted and 25% headed by July 5, both ahead of the five-year average, though conditions at 52% good to excellent run 12 points behind last year. The real sorghum story remains demand: exports are projected at 205 million bushels, holding most of 2025/26’s rebound to 220 million from just 98 million two years ago.
Among the small grains NASS did survey, barley production is forecast at 142 million bushels, up 1% from 2025 as a 6% increase in harvested area outweighs a 4-bushel drop in yield to 75.9 bushels per acre. Oats went the other way, falling 9 % to 63.2 million bushels on a 7% smaller harvested area — even though NASS forecasts record-high oat yields in Iowa and Minnesota.
Soybeans: Bigger Crop, Bigger Exports, Same Bottom Line
Soybean production was raised 40 million bushels to 4.475 billion on the higher harvested area — 84.4 million acres — reported in the June Acreage survey, with the yield forecast steady at 53.0 bushels per acre. In a sign of confidence in demand, USDA passed the entire supply increase through to exports, now 1.66 billion bushels, up 30 million, leaving ending stocks unchanged at 310 million. Crush was held at a record 2.75 billion bushels, underpinned by biofuel demand that has soybean oil’s domestic disappearance for fuel climbing to 17.8 billion pounds. Prices were untouched: $11.40 per bushel for beans, $310 per short ton for meal, 70 cents per pound for oil. Globally, the board nudged soybean ending stocks down 0.7 million tons to 124.2 million, mainly on lower Brazilian stocks, while raising Chinese imports and crush.
Rice and Cotton: Opposite Corners of the Acreage Report
Rice is the sleeper story of this WASDE. All-rice production was slashed to 153.3 million hundredweight, down nearly 13% from last month, after the June Acreage report confirmed that unfavorable Delta prices pushed growers into alternative crops — planted area fell to just 2.02 million acres. Ending stocks were cut 28% on the month to 30.9 million hundredweight, and the season-average farm price jumped $1.40 to $14.90 per hundredweight, with long-grain up $1.50 to $13.50. Cotton went the other way: production was raised 400,000 bales to 13.7 million on higher planted area of 9.85 million acres and a 6-pound yield increase to 872 pounds, pushing ending stocks up to 4.1 million bales — a 29.5% stocks-to-use ratio — with the price stuck at 73 cents per pound.
Livestock, Dairy and Sugar: Margins and Corrections
On the animal-protein side, total 2026 red meat and poultry production was raised as bigger broiler and turkey output more than offsets lower beef and pork. Beef production was trimmed on a slower pace of steer and heifer slaughter and lighter dressed weights, with cattle prices raised for the third quarter on June’s strength. The June Quarterly Hogs and Pigs report pulled pork production down for both years. Milk production was raised for 2026 and 2027 on larger cow inventories, and the continuing supply growth pushed the 2026 all-milk price forecast down to $20.00 per hundredweight, with 2027 lowered to $19.85. The sugar section carries an unusual housekeeping note: a company’s corrected delivery data going back to 2019/20 accumulated to a 145,870-short-ton revision in ending-month inventories, and combined with a smaller sugarbeet area from NASS and larger Mexican imports, leaves 2026/27 ending stocks at a 13.5% stocks-to-use ratio.
Citrus: An Orange Rebound Takes Hold
The Crop Production report’s second headline — easy to miss beneath the wheat news — is that the U.S. all-orange forecast for 2025-2026 rose 3% from the previous forecast to 2.61 million tons, up 11% from last season. Florida’s crop, at 12.9 million boxes, is up 6% from the prior forecast, with Valencias up 9%, and Texas is up 20% on the month. After years of hurricane- and greening-driven decline that took all-citrus output from more than 8 million tons in 2019 to barely 5 million, two consecutive years of stabilization suggest the sector may have found a floor.
All-citrus production is forecast up for a second straight season — modest, but the first sustained improvement in a decade. (Source: USDA NASS)
The Weather Behind the Numbers — and What Comes Next
June’s weather rearranged the drought map without rescuing the crop that needed it most. Downpours — aided by short-lived Tropical Storm Arthur — delivered major relief across the South, cutting national drought coverage from its April 21 peak of 62.78 % of the Lower 48 to 47.84% by June 30. But the rains largely bypassed or arrived too late for the Plains wheat belt, while the western Corn Belt turned worryingly dry: late-June topsoil moisture was rated 54% very short to short in South Dakota and 42% in Nebraska. Severe weather added its own toll, with nearly 400 tornadoes observed nationwide in June, more than 150 of them in Illinois and Indiana.
Drought remains entrenched across the West and lingers in the Plains despite June’s southern rains. (Source: U.S. Drought Monitor via USDA NASS)
The market’s attention now pivots to August 12, when NASS releases the first survey-based corn and soybean yield estimates of the season alongside the next WASDE. With USDA still carrying trend yields of 183.0 bushels for corn and 53.0 for soybeans, and with corn’s balance sheet already 170 million bushels tighter than it was a month ago, the stakes for that report are unusually high for mid-summer. For wheat growers, the question is starker: whether the smallest American wheat crop in 56 years can eventually pull prices above the $6.00 forecast in a world market where Russia, Ukraine and Argentina are all harvesting more, not less.
