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I’m holding an active wheat position that’s up around 30%, and I wanted to walk you through the research that keeps me in it.
This isn’t a headline play or a technical bounce. It’s driven by fundamental supply data that deserves attention — especially as weather and planting conditions add pressure across key producing states.
The Numbers Behind the Trade
Here’s what stands out: The U.S. is set to harvest the smallest wheat crop in 54 years.
Winter wheat has been hit hard, condition ratings have plunged, and both yield and planted area are running low.
That combination gives us a structural supply problem that traders can price directly, since these contracts settle based on U.S. wheat rather than global output.
It’s also worth remembering that the U.S. accounts for only about 8% of global wheat production. So while the world may not feel the impact of our crop issues, the U.S. market certainly does — and that’s what these contracts reflect.
The regional picture is even more concerning…
In Colorado, Oklahoma, Texas, Kansas, and Nebraska — the core winter wheat belt — good-quality wheat has dwindled to roughly 14%, with the majority rated poor or very poor.
When the heart of domestic production falters, it reinforces a supply story that traders can’t ignore.
Why I’m Not Taking Profits Yet
Someone asked whether we should exit wheat, and with the position up about 30% and expiration set for June 18, I’m inclined to stay patient.
These contracts don’t suffer from theta decay, so time is working with us rather than against us.
With that much room before expiration, there’s no rush — you have time to let the thesis develop, and I plan to hold a bit longer.
The fundamental backdrop hasn’t weakened. If anything, the combination of diminished crop quality and shrinking regional output supports staying in the trade.
Wheat behaves differently from crops like soybeans or corn, which react more directly to shifts in U.S. supply. Wheat is a global market, but domestic contracts still respond heavily to our own production challenges.
That’s why I’m letting this play out. The setup still looks constructive, and if momentum keeps building, I wouldn’t be surprised to see a push toward $7 wheat in the near term.
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