Important updates and advice regarding coronavirus (Covid-19)

Frontrunner - 22nd May 2020

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World wheat markets had a poor start to the week as traders digested the bearish United States Department of Agriculture (USDA) World Supply and Demand report published last Tuesday. The report signalled ample grain supplies for the coming season and US wheat futures fell to lows not seen since last September. However, prolonged dry weather is adversely affecting the wheat production prospects for some of the primary producers across the Northern Hemisphere and leading officials and analysts to lower their crop estimates. This triggered a wave of buying mid-week and wheat futures rallied sharply.

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Milling wheat - final decisions

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As I write this, glancing out of the window to look at blue skies over dry soil, it's all too easy to forget the extremely wet autumn and winter we all endured. Clearly, this posed a massive challenge for establishing autumn crops and has led to one of the smallest winter wheat areas we've seen for decades. 

It did, though, also cause large amounts of mobile nutrients like nitrogen and sulphur to be leached out of the soil, meaning we started spring growth with very low levels naturally available. Indeed...

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Frontrunner - 15th May 2020

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This week, the United States Department of Agriculture (USDA) published its World Supply and Demand Estimates for May, which included its first look at the 2020/21 season. An increase in supply exceeding demand is anticipated, which will lead to increased year-end stocks for both wheat and corn. 

Corn production in the US - the world's largest producer - is predicted to jump significantly. By the end of last week, US farmers had drilled over two-thirds of the planned corn area. The area planted is expected to increase by over seven million acres on last year and yields should increase by over 6%.

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Frontrunner - 7th May 2020

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Following a period of beneficial rain for much of the UK, northern Europe and countries in the Black Sea region, world wheat markets continued to fall earlier this week. London wheat futures lost all gains made during March and April as wheat crop production worries reduced. Improved supply prospects weighed on prices as well as freshly published estimates for reduced demand due to the impact of coronavirus. The latest EU balance sheet from Brussels cut approximately two million tonnes each from both feed and non-feed demand.

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Frontrunner - 1st May 2020

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Prolonged dryness has been adversely affecting wheat crops in the UK, northern Europe and the Black Sea region. This has helped support world wheat prices in recent weeks. This week, however, saw a change to weather patterns as low pressure systems sweeping in from the west brought much needed rain and relief to stressed winter and spring wheat fields. Confidence that notable yield losses may have been avoided triggered a wave of selling on futures markets. Buyers stood aside and prices dropped to eight-week lows. It remains to be seen how beneficial this rain has been.

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Frontrunner - 24th April 2020

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Wheat markets rallied sharply earlier this week, recovering much of the previous week's losses. Attention turned away from loss of demand due to the impact of Covid-19 to problems with supply, especially in the ethanol sector.

The Ministry of Agriculture of the Russian Federation stated that grain exports would cease once the seven-million-tonne quota they set for the last quarter of the season was reached. It is thought that 3.5 million tonnes of that has already been shipped. Over one million tonnes is being loaded at Russian ports each week, meaning the quota will be surpassed early May.

The Ukraine is also close to meeting its wheat export quota of 20.2 million tonnes, having now shipped 18.5 million tonnes. It is also reported to be considering limiting corn exports to 29.3 million tonnes while the United States Department of Agriculture (USDA) has targeted 32 million tonnes.

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Frontrunner - 17th April 2020

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Prolonged dry weather in parts of Europe, Russia and Ukraine has resulted in dry soils that are well below average. This has been a strong supporting factor for wheat markets in recent weeks. However, rain arriving in the western side of Europe, as well as Russia and eastern Ukraine, has eased concerns for crop development in those regions. Meanwhile, analysts have been assessing the impact of coronavirus on wheat demand in the milling, animal feed and ethanol sectors and have adjusted their balance sheets accordingly. Last Thursday afternoon, the United States Department of Agriculture (USDA) cut both world wheat and corn use by approximately five million tonnes each. This raised year-end stocks for each commodity by the same value. European analyst Stratégie Grains published its EU balance sheet this week, cutting two million tonnes from last month's estimate of EU wheat use this season and almost three million tonnes for the 2020/21 season.

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Frontrunner - 9th April 2020

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The UK wheat market has been less volatile than it was last month, making small gains and recovering some of last week's losses. French wheat futures rallied €6 to highs not seen since August 2018. This has been encouraged by the fast EU export pace, which reached almost 25 million tonnes – 67% up on last year and closing in on the season's target of 31 million tonnes. France had its biggest March soft wheat export programme to countries outside of the EU for ten years, despite the logistical challenges brought by the coronavirus. UK wheat prices were capped by firmer sterling and the weight of the old crop surplus that is unlikely to be shipped and will need to carry into next season. New crop prices are supported by the continuing dry spell and increasing temperatures, not just in the UK but across western Europe and extending into eastern Germany and Poland. Crops will become increasingly stressed without rain.

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Frontrunner - 3rd April 2020

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We're working hard to ensure we comply with all Government guidance and continue to deliver good service to our customers. This week we published three updates on our website to provide information related to Covid-19 for customers and suppliers, including updates on social distancing and customer service, additional information on payments, invoicing and administration, and information for third party hauliers. 

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Welcome dry weather but implications for liquid fertiliser

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The recent dry weather has been incredibly welcome and has finally allowed drills, sprayers and fertiliser spreaders to roll across the country. But, dare I ask, how long will it be before we're looking for some fresh rain?!

There is clearly a massive variation in growth stage and condition of the autumn crops across the country, but the more forward crops have started to get hold of applied nitrogen and actually look quite good .At the other extreme, some of the most backward crops are not that far ahead of the spring cereals that are now going in the ground. As long as reasonable seedbeds can be achieved and drilling doesn't get delayed, the potential for these spring crops should be good. 

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Frontrunner - 27th March 2020

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Frontier's number one priority will always be the health and safety of our colleagues, customers and those with whom we have contact during our normal business operations. We are actively and continuously monitoring the situation and basing our actions on the very latest advice from the Government. These actions currently include a range of measures such as minimising the number of people at our sites, colleagues working from home where possible, implementing social distancing measures and self-isolating when necessary. We have also implemented service contingency plans in order that we can continue to deliver a service which is 'business as usual', albeit with some changes to the way we operate. Read the full statement from Mark Aitchison, Frontier's Managing Director, here.
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Frontrunner - 20th March 2020

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The impact of coronavirus continues to be the primary driver for financial and commodity markets. World wheat prices saw significant volatility this week, driven by exaggerated moves in foreign exchange rates and high nearby consumer demand. The Bank of England cut UK interests rates to a record low of just 0.1% and, with the British government introducing other financially supportive measures for the UK economy, sterling fell by 6.5% versus the euro. As a result, London wheat futures rallied to new contract highs for November 2020 and, from the lowest to the highest, achieved a spread in prices of £12/t. The euro also fell versus the US dollar, adding value to European wheat prices. Demand for bread products increased as panic buying cleared supermarket shelves, brought millers back to the market, and added weight to the increase in old crop wheat prices.

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Frontrunner - 13th March 2020

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The impact of coronavirus on global economies has been the overwhelming factor driving wheat prices this week. The widespread panic-selling seen in stocks and shares and crude oil spilled into all commodities, pushing world wheat prices down. 

US wheat futures fell to lows not seen since last September and their losses since mid-January rose to 15%. However, the impact of this on UK wheat futures was reduced as sterling lost ground to the euro following the Bank of England base rate cut of 0.5%.

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Frontrunner - 6th March 2020

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Despite the increasing spread of coronavirus and concerns surrounding its potential impact on demand, world wheat markets have managed to tread water this week with overall minimal change. International trade does not appear to have been affected yet, with importing countries such as Tunisia, Korea and Thailand continuing to make wheat purchases.

​Although Friday morning saw price volatility, US wheat futures were trading within one cent of last week's closing prices. Concerns may be greater for supply rather than demand. Furthermore, a Chinese government working group stated that farmers must not let grain output decline this year despite coronavirus ensuring food security.

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What are the nutrition implications following the autumn/winter rainfall?

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Well, it won't be surprising to learn that many soils will have lost nitrogen via leaching.

To demonstrate the impact, AHDB has produced a map to show the winter rainfall classification. This forms part of the RB209 book method for producing a Soil Nitrogen Supply (SNS) index and is a good starting point as you begin to look at your nitrogen programme for this spring. 

However, rather than rely solely on this information, our team at Frontier decided to carry out the measurement of Soil Mineral Nitrogen (kg N/ha) at a number of nationwide trial sites. The findings are outlined in the below table.

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Frontrunner - 28th February 2020

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The spread of the coronavirus has triggered record-breaking falls in stock market values this week, with crude oil losing a quarter of its value since the beginning of 2020. This negativity has inevitably spilled into grain markets and world wheat prices have dropped 6% since last Friday's close. 

There are concerns over the impact the virus could have on supply chains and demand, although international trade appears to be continuing as normal at present. Futures markets are oversold but, should the virus continue to spread, it seems likely that global wheat prices will continue to come under pressure.

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Frontrunner - 21st February 2020

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Farmers in Russia have enjoyed the opposite of the dire weather conditions endured by UK farmers. Prolonged settled weather during the autumn and a mild winter allowed Russian farmers to exceed their winter wheat planting expectations and there are limited signs of any damaging winter kill. 

Various analysts are now suggesting that the Russian 2020 wheat harvest will be the second highest on record. Estimates range from 75-85 million tonnes with the record being harvested in 2017 at 85 million tonnes. 

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Frontrunner - 14th February 2020

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US wheat futures markets eased again this week, dropping to price levels not seen since December.This drew Black Sea and European markets lower too. There is still no evidence of any US wheat export business to China following the signing in mid-January of 'phase one' of the China/US trade deal, and US wheat is not competing for business in other markets such as North Africa.

This week, Egypt held a tender for wheat to be supplied during April. They bought 180,000 tonnes from both Russia and Romania at prices that, on average, were $6/t below their previous tender from France two weeks ago.

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Frontrunner - 7th February 2020

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World wheat markets have managed to achieve modest gains this week, supported by ongoing strong international export trade but lacking any fresh price drivers. Futures remain a good 4% below their January highs. China remains a primary focus, with the combination of their wheat buying activity, the coronavirus outbreak and their trade deal with the US creating a recipe of uncertainty.

Following the signing of 'phase one' of the US/China trade deal, US traders expected to see a wave of wheat buying activity as China began their obligation to purchase US agricultural products. 

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Frontrunner - 31st January 2020

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Having rallied to 18-month highs early last week, world wheat markets have subsequently taken a negative turn with US Chicago Board of Trade (CBOT) wheat futures leading the move lower.

Expectations for sizeable US wheat export trade to China following the signing of 'phase one' of the US/China trade agreement so far has failed to materialise, triggering a fund sell-off. The worsening coronavirus outbreak has added to the negative market sentiment with a perception that it will inhibit trade to China. European markets have followed and London wheat futures have now lost £7 from the recent highs.

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