The 2022 US wheat harvest was smaller than previously forecast as dry soils in western growing areas cut into yields and caused heavy crop abandonment, the government stated. Chicago Board of Trade wheat futures surged 4.5% to their highest since June 29 as traders adjusted positions to reflect the lowered production view.

The disappointing US wheat crop, the second-lowest in the last 20 years, exacerbated worries about global grain inventories as harvests from other major crop producers also have come in lower than initially expected.

Wheat stocks remained slightly higher than a year ago, the US Agriculture Department said, as high prices cut into demand for US supplies. But the overall balance sheet was still tight at a time when export disruptions stemming from Russia’s invasion of Ukraine have left buyers scrambling to find grain.

“I see (US wheat) ending stocks dropping down below that 500 million bushel level and getting kind of snug, particularly for our quality milling wheat,” said Arlan Suderman, chief commodities economist at brokerage StoneX.

USDA said that wheat used during the quarter ended Sept. 1 was 543 million bushels, down 24% from a year earlier.