WHEAT

• USDA sees record high world wheat production

Wheat futures have been weaker leading up to the United States Department of Agriculture’s (USDA) December Word Supply and Demand Estimates (WASDE), which was published late on Monday. There was some evidence of short covering and slightly higher prices before the report, but subsequently that market moved back lower towards the November contract lows.

The headline figure was that world production was increased to 837.81 million tonnes, up 9 million tonnes on November’s report and a new record high. Understandably, markets were weaker on the news, but with the increased number futures losses were modest, with prices left hovering above their recent contract lows. The USDA was broadly in line with the recent higher official respective government revisions seen for Canada and Australia, with Canada at 40 million tonnes (a record high). The estimate for Argentina is up 2 million tonnes to 24 million, and would also be a new record high if other analyst estimates weren’t above 25 million. Higher production estimates were also made for the EU, Russia, and India. Another new record was noted, with the USDA seeing increased consumption for the season; up to 822.97 million tonnes. Year-end stocks are seen rising by 3.5 million tonnes to a total 274.87 million tonnes, which will be almost 15 million tonnes more on the year and the highest since the 2020-21 season.

The world corn balance sheet saw minimal change but a lower Ukrainian crop - down 3 million tonnes - takes world production down 3.3 million tonnes on last month. With a 500,000-tonne increase in consumption, end stocks are 2.2 million tonnes down on last month and 14 million tonnes down on the year. South American weather will be key to ensuring that production estimates for Brazil and Argentina can be met.

• Rain boosts Indian crop potential

India is the world’s second-largest wheat producing country and this year produced a record-breaking high crop, now seen by the USDA just short of 118 million tonnes. This leaves India self-sufficient in wheat, with its imports and exports only around 250,000 tonnes. India’s farmers have increased its wheat planted area this autumn, encouraged by abundant monsoon rainfall during the year. This has improved soil moisture and topped up reservoirs. 47.0 million hectares of winter wheat has been planted - up 6.1% on last year - according to the farm ministry. This leaves the country set for record wheat production in the 2026-27 season.

• US export pace bucks the trend

Whilst major wheat exporters Russia, Ukraine and the EU sit behind last season’s pace and are struggling to catch up, US exporters are enjoying a more positive shipping season. The US government shutdown during the autumn, having now come to an end, resulted in a loss of export sales data. That information is now available as the USDA get its numbers up to date. For the week commencing 6th November, export sales were 463,000 tonnes towards the top end of expectations and took the cumulative sold to 17.267 million tonnes, 22% up on the year. US wheat export inspections for the week commencing 4th December were 393,000 tonnes, marginally up on last week and just below the top end of expectations but took the cumulative up to 13.634 million tonnes, 21% up on last year. The USDA’s total US wheat export estimate for the season is 22.49 million tonnes; with some thinking this might increase and therefore cut year end stocks. However, the USDA left all data unchanged in its December WASDE.

BARLEY

• Export feed barley enquiries wane

The barley market’s recent supports were traders needing to cover earlier cargo sales into Spain and Ireland for December and January. Many of these sales have now been covered, with Spanish farmers eventually selling into the market, having been unimpressed with prices throughout the autumn. This currently leaves only a few trade shorts looking to cover nearby positions into Ireland.

• New crop trade occurs but in low volume.

Farmers have not recently engaged in selling new crop feed barley since values dropped away two weeks ago. There is a lower winter barley area due to increased oilseed rape planting, high fertiliser costs, and an uncertain pricing structure on malting barley, meaning we have reduced barley plantings nationally and the potential for only 6 million tonnes to harvest next summer - the smallest crop for 12 years.

OILSEEDS

Rapeseed and canola markets have softened over the past week as global supply expectations continue to outweigh demand signals. Rapeseed futures from trading exchange, Euronext eased, reflecting pressure from weaker soybean markets and the confirmation of large North American production. UK delivered values were broadly steady but traded with a weaker undertone.

The dominant driver remains Canada and Australia’s significantly larger 2025 canola crops, which continue to increase exportable supply and depress global pricing. This, combined with subdued oilseed demand and reduced buying interest in soybeans from major importers, has created a bearish tone across the wider vegetable-oil complex.

In the UK, tight domestic production offers underlying support, but this is being offset by plentiful global availability and higher than average European farm stocks. Rapeseed oil demand for food and biofuel remains consistent, but not strong enough to counteract the supply-side weight in the short term.

Markets now look to updated production estimates from Canada, the EU and Australia, alongside signals from global oilseed demand and energy markets. Without a fresh shift in fundamentals, sentiment is expected to remain cautious in the near future.

FERTILISER

• Urea/AN

Gran urea markets globally are under different amounts of pressure, but otherwise it's generally a quiet period globally for urea as enquiries and business in Europe slow. Egyptian values remain steady, with very little buying interest now that cargoes have been secured prior to the European Carbon Border Adjustment Mechanism (CBAM) deadline on 1st January and Algerian product has been purchased recently for long haul destinations further afield than Europe.

Over in the Americas, demand is expected for the spring period. However, demand is currently low which has eased values. In the Middle East, producers are focussing on fulfilling their offers for the last Indian tender, which has now been concluded. There is potential for a further tender at the very end of this year or into early 2026. UK values remain behind replacement values due to imminent vessel arrivals, with weaker exchange rates helping UK values and prices have eased slight ly. But it’s expected this may only be a temporary lull and as demand picks up, its likely we could see these prices increase to more closely reflect replacement values.

In the nitrates market, CF Fertilisers remains sold out for January and is reviewing terms for February at the end of this week. It is expected that nitrate prices will remain firm and could rise further as demand picks up. Nitrate supply is limited as we head into the new year and towards the spring usage period.

There also appears to be a lack of sulphur options available to the UK and Europe due to factory production cuts. This is coupled with the lack of Russian product entering Europe due to tariffs imposed by the EU, meaning the UK cannot buy Russian product. Please speak to your Frontier advisor for all your sulphur requirements, including UK produced polysulphate prices to address your sulphur needs.

Heading into the spring, there is a distinct reduction in available logistics. It’s recommended that at least a percentage of on-farm requirements be purchased ahead of the well-earned festive break.

• UAN

Earlier this month saw UK UAN suppliers release revised values to reflect current replacement costs, mirroring changes we’ve seen in the UK AN market. However, despite these increases, UAN pricing continues to offer growers a cost-effective option to deliver N and N/S when compared to solid alternatives in the marketplace. Growers with tank capacity on farm still have the opportunity to take delivery of product ahead of usage in the final weeks of 2025 and early into the first quarter of 2026. A full portfolio of both NS and NPKs products are available to suit cropping. Heading into the spring season with full tanks is recommended, firstly to secure product at today’s pricing and secondly to avoid delivery bottlenecks as seasonal demand builds through February and March.

• Straights/PKs/NPKs

Phosphate values continue to remain slightly weaker on the global market due to continued low demand. However, UK importers have to balance buying at the best time with having product available in readiness for the spring market, which could be at a higher price than current global values due to the time it takes for purchasing a vessel to its arrival time in the UK. Potash prices have also weakened slightly due to slow demand globally and the exchange rate.

We anticipate that pressures on the supply chain in spring for fertiliser, whether it be raw material availability or logistics capability, are to be expected so to have your fertiliser on farm ready for usage is advised.

Please speak to your local Frontier contact or email us at info@frontierag.co.uk for more information or advice related to any of the topics and services mentioned in this report.

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