Wheat futures climbed about 2% to $5.82 per bushel on Monday, rebounding from a near five-week low of $5.71 on April 10. The move followed a sharp rise in oil prices, which intensified concerns over fuel and fertilizer costs after the collapse of US–Iran talks and renewed fears of a potential blockade of the Strait of Hormuz. Crude jumped roughly 8% to above $100 per barrel as the US Navy prepared for possible actions that could disrupt Iranian shipments.
Higher input costs are stoking worries that farmers may cut back on wheat plantings, a crop that is relatively fertilizer-intensive. The USDA recently projected US wheat acreage at its lowest level since records began in 1919. At the same time, drought across major growing regions has further darkened the outlook, with only 35% of the winter wheat crop rated in good to excellent condition. Even so, wheat futures are still down more than 5.5% over the past two weeks amid expectations of ample global supply.
