Key facts
- Grain prices experienced their largest monthly increase since 2008.
- The Ogallala Aquifer, vital for U.S. farming, is steadily depleting.
- KC wheat prices have fallen 16% from their May high.
- Good/excellent ratings for the KC wheat crop are at 26%.
- A Western drought is shrinking crops and accelerating cattle liquidation.
- Tomato prices have hit a 45-year high due to supply chain disruptions.
- Average retail ground beef prices reached a record $6.90 per pound last month.
- The U.S. cattle population is at its lowest level since 1951.
- Corn farmers face potential losses of up to $100 per acre.
- Managed funds sold approximately 90,000 corn contracts in one week.
- New crop corn prices are lower than pre-war levels despite higher input costs.
- On May 29, Iowa reported an average corn price of $4.10 and soybeans at $11.23.
Global grain prices are exhibiting significant volatility, with wheat and corn futures experiencing divergent trends. Wheat prices saw their largest monthly surge since 2008, impacting global food supplies and potentially leading to widespread food inflation. Conversely, CBOT corn, soybean, and wheat futures declined amid speculation that U.S. tariffs could prompt China to withdraw from a trade deal. Managed funds divested approximately 90,000 corn contracts in the latest week, marking the largest such sale since May 2025, suggesting a bearish sentiment in the corn market. New crop corn prices are currently lower than pre-war levels, despite significantly higher fertilizer and diesel costs.
The agricultural sector faces multiple challenges stemming from environmental conditions and market dynamics. The Ogallala Aquifer, the largest underground water supply in the U.S. and crucial for national farming, is steadily diminishing, posing risks to future food production and price stability. An unprecedented Western drought is shrinking crops, drying up wells, tightening hay supplies, and accelerating cattle herd liquidation, according to Ben Rand of Blue Line Futures. Good/excellent ratings for the KC wheat crop are at a mere 26%, with prices falling 16% from their May high. Corn farmers nationwide are experiencing significant financial strain, with potential losses reaching up to $100 per acre.
Supply chain disruptions and demand shifts are also contributing to price fluctuations. Tomato prices have surged to a 45-year high, with no immediate improvement expected. U.S. beef prices reached a record $6.90 per pound last month, up 19% year-over-year, as the U.S. cattle population is at its lowest since 1951 due to drought, heatwaves, and increased feed costs. Demand remains steady, contributing to sustained high prices. Meanwhile, demand for fiber-rich grains is fueling the premium flour industry, offering less processed, more expensive alternatives.
Specific market data includes Iowa reporting an average corn price of $4.10 and soybeans at $11.23 on May 29, while Illinois reported higher prices with corn at $4.26 and soybeans at $11.63. Turkey's TMO announced 2026 grain purchase prices, setting durum and milling wheat at approximately $359/MT and barley at approximately $278/MT. Russian FOB wheat prices reached a seasonal high of $247/mt last week before beginning to decline.