Wheat registered a sizable gain this week, with the agricultural commodity continuing its strong first-half start. Agricultural commodities have ballooned this year on tight supplies, robust demand, and concerns that the worst El Niño season in a thousand years could decimate global food supplies.
September wheat futures fell $0.0425, or 0.61%, to below $6.96 per bushel at 13:44 GMT on Friday on the Chicago Board of Trade. Wheat prices are on track for a weekly increase of about 3%, lifting their year-to-date gain to almost 38%.
Experts warn that the 2026-2027 El Niño weather pattern—meteorologists have referred to it as a “Super” event—could raise food commodity prices by up to 16% due to lower crop yields and reduced farm output. At the same time, market watchers say there are enormous baseline global grain inventories that could cushion the blow of hot and dry conditions.
“A strong late-2026 to early-2027 event would increase weather-driven volatility, with the largest downside risks concentrated in Brazil, Australia, India, and Southeast Asia, while Argentina is the clearest potential beneficiary from improved rainfall,” S&P Global Energy CERA said in a report.
The most impacted commodities could be corn, soybeans, and wheat.
“El Niño conditions are already underway and are forecast to strengthen rapidly into a strong event. This will intensify the chances of drought and heavy rainfall,” said WMO Secretary-General Celeste Saulo.
Geopolitics has also supported grain prices this year amid the ongoing Ukraine-Russia conflict and the war in Iran.
Moscow and Kyiv have initiated military strikes on grain export facilities and energy infrastructure. Alternative land routes are also being damaged by strikes.
Meanwhile, the war in the Middle East is driving up fertilizer prices. The Strait of Hormuz not only handles 20% of the world’s oil supply, but it also facilitates the transport of key inputs, including fertilizers.
These conditions are bleeding into the United States as well, says CoBank’s lead economist Jacqui Fatka.
“Cash is tight at the farm gate, limiting some growers from locking in any product for the next crop year until additional financing or working capital becomes available,” she wrote in a client note this week, according to CNBC.
Other agricultural commodities all posted weekly gains, but Friday’s performances were mixed.
September corn futures were little changed at $5.0325 a bushel. September soybean futures slipped $0.0275, or 0.22%, to $12.3375 per bushel. September coffee futures erased $0.0385, or 1.17%, to $3.257 per pound.