By Kirk Maltais

The Agriculture Department lowered its outlook for U.S. wheat production in 2026, amid drought conditions seen in the western plains.

The USDA said it projects 1.56 billion bushels of wheat to be produced in the U.S. this year in its monthly World Agricultural Supply and Demand Estimates report published Tuesday. That is down from last year, when the USDA projected production of 1.98 billion bushels.

Analysts surveyed by The Wall Street Journal had forecast 2026 total wheat production to total 1.73 billion bushels. The USDA said that its reduced outlook for wheat production more than offset an estimate of higher beginning stocks for the crop.

Underpinning the cut is a sizable reduction in the size of the U.S. winter wheat crop. That crop is now seen at 1.05 billion bushels, down roughly 350 million bushels from last year and roughly 100 million lower than forecast by surveyed analysts.

"The USDA shocked the trade with that huge reduction in winter wheat production," Brian Hoops, president of Midwest Market Solutions, said. "This was the largest cut in production from the April to May report in history."

Meanwhile, the USDA pegged U.S. corn production as lower than last year, with more soybeans expected to be produced. The USDA said that 16 billion bushels of corn would be grown this year, along with 4.44 billion bushels of soybeans. For corn, that is slightly higher than analyst estimates of 15.95 billion bushels, while for soybeans, it is lower than expectations of 4.45 billion bushels.

The report did maintain favorable projections for corn demand in 2026/27, said Brady Huck, head of EmpowerAg Trading. "The USDA remains optimistic both ethanol and export demand for corn will remain robust," Huck said.

Wheat futures on the CBOT are limit-up 7.1% following the WASDE's release, trading at their highest level in nearly two years. Corn futures are up 1.3%, while soybeans rise 1.3% ahead of the start of the U.S.-China summit.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

May 12, 2026 13:38 ET (17:38 GMT)

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