Farmers Are Getting Crushed as Wheat Slides for a Record Stretch

December Chicago wheat has fallen $1.80 per bushel since the week of Aug. 24, 2026, and on Oct. 28 dropped 11¼ cents to a four-month low of $5.99; the most-active contract has lost 4.7% in the week through Oct. 23 and logged eight consecutive weekly declines. WEAT is down 21% from late-August levels, while growers face higher costs: diesel averaged $6.3499 a gallon, up 72.8% year over year, and farm-group economists project wheat losses of $114 per acre in 2026 and $145 in 2027. Abundant global supply, subdued demand and U.S. exports roughly 35% below a year ago weigh on prices, though crowded speculative shorts could fuel a rebound; Deere expects North American large-ag sales to fall 15%–20% in fiscal 2026, while ADM’s adjusted EPS guidance is $5.15–$5.60.

Analysis

The key asymmetry is between crop prices and processing economics: cheaper grain can help ADM’s input costs and throughput, but it does not guarantee stronger earnings if crush, ethanol or biofuel margins compress. Treat ADM’s guidance as a margin thesis, not a simple wheat-price hedge; its next report is the near-term test. For Deere, the more important second-order channel is farmers deferring equipment purchases as cash flow tightens. Government support may cushion demand, but it can mask rather than reverse deteriorating farm economics. Watch order trends and guidance, not a single quarter’s sales mix.

For wheat exposure, crowded shorts create squeeze risk even if the supply backdrop remains bearish. A rebound can be sharp and temporary; WEAT adds a separate structural headwind from futures rolling, so it is a poor proxy for a long-term spot-price view. Near term, the Oct. 30 settlement above $6.25 would weaken the bearish setup; failure to reclaim it leaves the path of least resistance lower, absent a weather or Black Sea shock. Over 6–18 months, persistently high input costs and weak crop revenues could deepen farm credit stress and prolong equipment weakness. The contrarian risk is assuming the long losing streak itself signals capitulation: short covering can lift prices without changing export demand or global supply.

Key Decisions for Investors

• Prefer a conditional relative-value position: long ADM versus short DE, sized conservatively, only if ADM’s report supports crush/biofuel margins while Deere confirms weak North American equipment demand. Exit or reassess if ADM cuts its outlook or Deere reports a clear demand recovery; this is not a pure wheat-price pair.
• Avoid initiating a strategic long in WEAT solely on the losing streak or trendline support. Its roll mechanics can erode returns even if spot wheat stabilizes. Revisit only after evidence of a catalyst—such as a weekly close above $6.25 or a material supply/export disruption—and verify the fund’s current curve exposure.
• Keep wheat exposure tactical rather than directional at current crowded positioning: a close back above $6.25 is an alert for short-covering risk, not proof of a durable bull market. A weather shock or renewed Black Sea disruption would invalidate the bearish supply thesis.
• Monitor farm credit and Deere order indicators over the next 1–3 months. Rising delinquencies or further Chapter 12 pressure alongside weaker equipment guidance would reinforce the downside case; improving farm receipts or a sustained easing in fuel and fertilizer costs would falsify it.