It's a classic wheat story: just when the market looks cornered by big supplies and calm weather, the pieces on the board start to shift. After a strong rally to start June, wheat futures faded to start this past week, giving back a portion of recent gains. At first glance, it looks like classic harvest pressure — corn is down, the weather is cooperating, and combines are rolling. The real story, however, is more complicated. In wheat, context matters. Right now, the market is being driven by a delicate mix of crop conditions, fund positioning, and the potential for headline risk to flip the narrative.
From a condition standpoint, the U.S. winter wheat crop is in the best shape it has been in years. Good-to-excellent condition ratings are sitting above 50% — a major improvement from where the crop stood last fall. That’s great on paper, but as harvest rolls north, there is reason to pause. Wet conditions in parts of Oklahoma and Kansas have already caused delays. That moisture raises concerns about test weight, sprout damage and disease pressure — all of which could impact overall quality. This year, the U.S. winter wheat crop may be big in volume, but what matters more is how it grades. This makes the spring wheat crop, further north, an important piece of the puzzle.
High protein spring wheat plays a critical role in blending and milling, especially when the bulk of the U.S. wheat crop — winter wheat — tends to run lower in protein. At this point, it's very possible the U.S. ends up with a large winter wheat crop that looks good on paper but falls short in protein. This would make spring wheat an important ingredient for blending. With last year’s spring wheat crop falling short with vast amounts of feed wheat in the heart of the Red River Valley, quality spring wheat supplies are already tight.
Unfortunately, for producers, demand hasn’t been strong enough to support protein premiums, but that could change later in the season. Meaning, millers and exporters may need to chase premiums later in the season — especially if there is another spring wheat shortfall.
Spring wheat conditions are off to a favorable start, with early ratings stronger than last year. That’s encouraging, but in this market, just being “good” isn’t enough. With lower planted acres in 2025, the spring wheat crop will carry a heavier burden to deliver not just in volume but also in quality. This year, the protein content could become a major driver. The good-to-excellent rating right now tells us the crop has potential but unless the crop performs where it counts — the specs — the market could tighten quickly. That quality gap could quietly become one the wheat markets most important factors later this summer.
Despite harvest concerns, wheat export demand has quietly started the new marketing year with a bang. The U.S. booked strong business in late May and early June, putting the U.S. on pace for the best early export start in over a decade. That's not just a fluke — it's happening against the backdrop of global uncertainty. Between ongoing conflict in the Black Sea and rising tensions in the Middle East, global buyers are keen to lock in supply. Even if shipping lanes remain open, the potential for disruption puts a premium on reliable supply. That plays in the U.S.’s favor. If the U.S. doesn’t move wheat early, global buyers may look elsewhere once harvest ramps up for other major exporters.
Another important dynamic for the wheat market right now isn’t in the field — it's on the books. Managed money remains heavily short across all three wheat exchanges which has been pressuring the trade for months, largely justified by large global stocks, improving weather forecasts and harvest pressure. However, when positions become largely one-sided, it doesn’t take much to spark a reversal. Interestingly, on the June 13 rally in wheat, wheat exchanges experienced their largest volume spike since mid-April. That could be a sign that the funds are getting nervous. Volume isn’t just a speculative turn — it's usually backed by positioning. From a technical perspective, wheat exchanges need to clear the June highs to accelerate a short covering rally. The funds don’t like to be wrong for long, and with global risk elevated and harvest quality still uncertain, it wouldn’t take much for wheat to rally further.
In many ways, the wheat market is stuck between logic and potential. The logic says it's harvest time, and the crop looks good — prices should fall. On the other hand, potential says the funds are short, supplies could tighten and there is plenty of geopolitical risk to light a fuse. For now, wheat is reacting to the day-to-day flows. The bears are in charge until proven otherwise, but their grip is not the “be-all, end-all.” As hard red winter wheat harvest gains momentum and spring wheat enters its critical stretch, the market will need to decide if it's trading bushels — or risk. The wheat market doesn’t need a new bullish story; it just needs a reason for the trade to question the one that is already priced into futures.
For producers, this market demands balance. With winter wheat harvest underway and futures struggling to find direction, it's tempting to wait for a story to spark a rally. But that is not a strategy. If you are making sales, focus on scaling-up offers and use flexible tools like hedge-to-arrive (HTA) or minimum price contracts to keep upside open. For any unsold bushels be realistic — quality concerns may open premium opportunities, but only for those who are positioned to act. With spring wheat just kicking off the growing season, don't overlook the potential for better pricing opportunities later this summer. Keep targets in place, know your breakevens and remember: in a market like this, managing risk is as important as finding opportunity.
Allison Thompson is a market analyst with The Money Farm in Ada, Minnesota. She previously has worked as a Farm Business Management instructor and is active on her family's Mahnomen, Minnesota, grain farm.