Wheat futures slipped to around $5.80 per bushel in mid-June, returning to their lowest level since April 10, as the potential reopening of the Strait of Hormuz raised expectations of improved access to key agricultural inputs. A tentative US–Iran peace agreement includes reopening the strategic waterway, with Iranian Deputy Foreign Minister Kazem Gharibabadi confirming the deal and officials from both countries expected to meet in Switzerland to formalize it.
Increased availability of essential inputs used in wheat production—such as fertilizers and fuel—would enable more efficient output, boosting supply and exerting downward pressure on prices. At the same time, the USDA recently lowered its winter wheat outlook by 2% from the previous month, citing persistent drought across the Plains that has pushed hard red winter wheat production to its lowest level since 1957. Crop conditions have deteriorated further, with only 25% of the crop rated good to excellent, the weakest reading on record for this point in the season.
