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Frontrunner - 28th January 2022



Frontrunner is also available as a podcast, so you can hear the latest from our traders while you're on the go. Listen below or subscribe to the report on Acast, Spotify, Apple Podcasts and Google Podcasts. The report this week is read by marketing assistant, Becca Russell.


  • Volatile wheat markets

The world's wheat markets have seen significant price volatility this week. Fuelled by news reports of increased tension between Russia and the Ukraine, short covering and speculative buying extended gains on Chicago Board of Trade (CBOT) wheat futures by 6% by the close of Tuesday and took the market to its highest level since the end of November last year.

Subsequent diplomatic efforts gave markets confidence a solution to the tensions between Russia and the west might be found, easing speculation of any incursions into Ukraine. With hopes that trade flows and wheat shipments from Russia and Ukraine would continue uninterrupted, wheat futures markets saw heavy selling and, by close of play on Thursday, all the week's gains had been lost.

With Russia and Ukraine accounting for about 30% of the world's wheat export trade, it would seem likely that until a diplomatic solution is found, this matter will continue to generate volatility in the wheat market.

  • US winter wheat deteriorates

US winter wheat crop conditions were updated this week and the numbers paint a bleak picture. Condition continues to decline with just 30% of the Kansas crop rated 'good/excellent'; down three points since the start of the month and comparing to 62% achieving the same rating at the end of November. In Oklahoma, the decline was similar; there was a 4% drop to just 16% rated 'good/excellent' in comparison to 48% achieving this rating in late November. Ratings also slipped in Nebraska, Colorado and South Dakota. Illinois saw a sharp drop from 75% being rated 'good/excellent' in early January to only 42% achieving this rating as of the 24th January. In Texas, 71% of the winter wheat is rated 'poor/very poor'. With drought conditions forecast to persist through April by the US Climate Prediction Center (CPC), potential for the US winter wheat crop looks particularly challenged despite an increase in area to a six-year high.

  • EU wheat crops encouraging

In contrast to the US, fortunes for EU winter crops are encouraging. MARS, the EU crop monitor, has said winter crops in Europe have had favourable conditions due to relatively mild temperatures and normal precipitation across most of the continent and, currently, winter crops are in fair to good (or very good) condition. There is no significant frost damage seen so far; however, most areas have only built up a weak tolerance to frost due to the mild weather, presenting a risk should cold snaps arise.

The situation is less encouraging in North Africa. MARS has reported that crops in Morocco are facing persistent drought and rain is needed imminently in western and central Algeria. This signals the potential for increased wheat import needs next season.


  • Questions over old crop demand

Feed barley markets have not seen the volatility that global wheat markets have over the week. Fundamentally, small volumes are being offered forward by the farmer with good demand for the spot months from the trade as a result. However, given that barley's discount to wheat is narrow across the country, questions remain as to how much demand old crop barley will find especially for May to July.

  • New crop maintains discount to wheat

New crop discussions remain limited with both farmers and compounders largely absent from the market and barley generally tracking wheat at around a £15-20/t discount. Winter barley crops look well across the country and some spring barley may be drilled in February, particularly if the dry conditions seen in January continue.


  • Extreme volatility in the rapeseed market

This week, the rapeseed market has been subject to further volatility with question marks in the trade as to how much rapeseed European crushers will be able to crush in the final third of this crop year. Rising energy costs and the continued high values of rapeseed are making crush margins look weak in the UK and on the continent. To demonstrate the effect of this volatility, there has been a rise and fall of €40/t on the May MATIF futures contract within this week alone and there has been a difference of €100/t between the highest and lowest value of oilseed rape within January. This kind of volatility is unprecedented in the rapeseed market.

  • New crop prices stronger

Over recent weeks, new crop prices have become much closer to old crop values. At one point, the discount of new crop to old crop on the MATIF market was €170/t. It is now around €85/t, which sees UK ex farm values at around £490/t where available.

Next crop year should see a replenishment of stocks with a better Canadian crop and increased plantings in the UK and the EU. This will be a relief after one of the tightest supply years on record. One factor supporting the new crop market currently is the potential conflict between Russia and Ukraine. The EU is heavily reliant on Black Sea rapeseed in the first half of the year and, if a conflict ensues, we could see disruption to that traded flow. 


  • Lack of buyers coming forward to cover old crop positions

It has been a very quiet week of trading in the UK bean market with none of the volatility seen in other commodities. The only notable feature this week has been the lack of buyers looking to cover old crop positions. In early January, a combination of bids direct from consumers, exporters and shorts looking to take cover were reported, whereas most of that demand has now dried up. Any opportunity for more export business also seems limited as Sterling's strength against the Euro - now at 1.202 - makes UK beans less competitive to European buyers.

Spikes in new crop wheat prices recently gave growers a chance to price up 'premium over futures' bean contracts. However, due to the speed of the rise and fall in wheat futures, there was little opportunity to take advantage of these higher values.


  • AN/urea

Global urea values have continued to fall as a result of lesser demand and higher stocks. However, there is still some buyer interest to come from America as well as the Far East. UK demand for urea products is set to lessen and so there is little new buying interest for shipments, especially when arrival timing will be too late for applications. Ammonia prices also remain high and it's likely that more ammonia may get diverted from nitrogen production to other industrial uses which offer a better return on investment.

At the time of writing, it is rumoured that Russia will ban exports of ammonium nitrate (AN) for the remainder of this season. There has also been speculation of another Indian tender for around 1.2-1.5 million tonnes of urea to build stocks into next season.

Domestically, CF Fertilisers has withdrawn prices today and the market awaits what offers will be back on the table as of next week. Gas values have remained firm and, as a result, a small rise in AN values may follow.

  • Liquid/UAN

Supply on the liquid market is finite and offers are localised and grade dependent. We advise that growers who are still to buy calculate what requirements they have now to ensure they can access product for their crops this season.

  • PKs

Potash and phosphates remain stable on price, which is mainly due to currency exchange rates. UK suppliers are still waiting on delayed cargoes but the main concern which remains relates to haulage availability and whether suppliers will have the ability to deliver outstanding orders in a timely manner following disruptions caused by Covid-19.

Get in touch

Please speak to your local Frontier contact or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. for more information or advice related to any of the topics and services mentioned in this report. 

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