WHEAT

• USDA report sinks wheat prices again

Earlier this week, the United States Department of Agriculture (USDA) published its May World Agricultural Supply Demand Estimates (WASDE) and took a first look at 2025-26. Overall, there was a bearish set of numbers that resulted in the Chicago Board of Trade (CBOT) wheat futures falling to new contract lows.

The current season world production estimate was increased by almost 3 million tonnes, 1 million of which was the EU. Coupled with a drop of 1.5 million tonnes in consumption at the end of the year, stock rose by 5 million tonnes to a total 265.21 million tonnes. Although this is 4 million tonnes down on the year, it leaves a comfortable balance sheet and carry in for 2025-26.

The USDA estimates record production for next season; up to 808.5 million tonnes, with a notable increase for the EU up 14 million tonnes on the year. There are also increases in production estimates for Argentina, Canada, Russia, China and India. In contrast, Australia, Ukraine and Kazakhstan are all estimated to be down on the year. World consumption is expected to rise to 808 million tonnes, almost matching production and year-end stocks up 500,000 tonnes to 265.73 million tonnes. However, without China world stocks will rise 3.5 million tonnes to 141.83 million tonnes.

The world corn 2025-26 balance sheet has some notable changes on the year. Production is up 43.5 million tonnes, 24 million tonnes of which is thanks to the US, as farmers there plant an additional 5 million acres. Consumption will rise 24.4 million tonnes, but year-end stocks fall 9.5 million tonnes to 277.84 million tonnes, with two thirds of that in China.

• US wheat continues to improve

Recent rain across much of the winter wheat areas of the US has benefitted crops. The US weekly crop progress report put winter wheat condition 3 points up on the week and ahead of trade expectations at 54% good/excellent. It is now 4 points ahead of last year. Corn planting progress is also going particularly well, with 62% planted up 22 points on the week, 6 points ahead of average and 15 points ahead of last year. The progress of spring wheat is similar, now 66% planted and up 20 points on the week and 17 points ahead of average.

This week is the annual Kansas Wheat Tour and on day one recorded an improving picture on last year. They see the Northern Kansas wheat yield at 50.5 bushels per acre up from 49.9 bushels per acre on day one last year. This is close to the USDA’s national yield estimate of 51.6 bushels per acre, up from 51.2 bushels per acre last year. The planted area is estimated at 45.4 million acres, down 500,000 acres on the year.

• Black Sea troubles

Weather has been damaging for crops in Ukraine, with frosts and drought having stressed or killed some wheat crops in southern regions. Analytics and information agency APK-Inform said up to 40% of crops in southern areas had suffered significant damage. Spring crops had also been affected by dryness and frosts followed by unusually high temperatures in April. Temperatures had dropped as low as minus 11° Celsius. Frost damage is also a concern for some Russian wheat crops, but there are wide ranging 2025 production estimates from below 80 million tonnes to above 86 million tonnes. The USDA is mid-range at 83 million tonnes.

BARLEY

• Large regional differences appear on old crop feed barley

Cheap supplies of feed barley have appeared from merchants in East Anglia looking to clear stocks before harvest, trading into local homes in Norfolk in the low £150’s delivered. It will be interesting to see if offers like this continue. However, western feed compounders and merchant shorts into them have been paying between £15-16/t more secure supplies for May. The merchant shorts no doubt have June to buy as well. As a result, we are once again pricing west for East Anglian suppliers to buyers into the M5 and M6 corridors.

• New crop domestic feed markets are active

Even though the discount of feed barley to feed wheat is relatively small, we are finding buying interest in England. At £15-16/t under wheat, barley only remains at maximum inclusion in pig rations, but we are also finding some interest into ruminant mills as well. This is good news, as the prices to export customers for the harvest position are quite low, due to the ever-growing value of sterling reducing our local price, cheap offers of barley from the Baltic states into Ireland and zero demand into Spain. These EU buyers are also eyeing up supplies of grain maize from Brazil and the USA as prices get cheaper

• EU malting market nervous

The malting barley market has virtually stopped, with demand for beer still lower than normal and maltings are working at reduced capacities compared with previous post COVID . On top of this, southern EU countries are looking at ample rains and if they stop in time for harvest, they should produce crop lower in nitrogen and higher yields (like the UK did last year). In the northern part of the EU where most of the malting barley is grown, crops need rain in the next two to three weeks if they are going to produce even an average crop. After that point, yield and quality will become impaired. Naturally fixed priced sellers are few and far between in the area.

OILSEEDS

Rapeseed values have strengthened over the past week, with MATIF futures trading €15 higher week on week. This is driven by support from the global oilseed complex. Soybean futures reached a three-month high on the CBOT, following progress in the trade talks between the US and China. From 14th May, the US will lower tariffs on Chinese goods to 30%, while China will cut duties on US commodities to 10% for a 90-day negotiation window. Soya oil prices also gained, supported by increased demand for biofuel. Proposed changes to US biofuel tax credits would exclude imported feedstocks like tallow and used cooking oil, boosting demand for domestic soya oil.

On the supply side, EU rapeseed production is forecast to rise by 2.5 million tonnes in 2025, due to larger than expected plantings and the potential for yield recovery depending on weather conditions over the next four to six weeks. US corn and soybean plantings continue to progress rapidly to 62% and 48% of the intended area, well ahead of the five-year averages of 56% and 37%. South American production is projected at a record 232 million tonnes, up 15 million tonnes from last year, adding weight to global supply expectations.

Fertiliser

• Urea/AN

Pressure on urea in the US has continued, with prices there remaining firm and hitting levels not seen since 2022. Strong spring demand, tightening supply, and new baseline tariffs have sent prices up over 40% since January.

The US is now the highest-priced urea market globally, pulling cargoes from North Africa and the Baltics. However, Middle East cargoes are now going to Australia and India instead of the USA due to US tariffs.

Egypt, the main EU and UK urea supplier, turned from a net liquified natural gas (LNG) exporter to a net importer at the end of 2024, in a move to strengthen energy security and reduce power outages. This move means Egypt is more exposed to global prices and therefore fluctuating urea production costs, but is still at risk of curtailments at manufacturing facilities at times of extreme weather causing high power requirements.

Whilst the global market waits for the next Indian tender, China has issued urea (prilled and granular) for export, but with little interest from markets until more detail on timings and volume is published. It’s unlikely to have a major impact on the EU and UK markets, but could influence them at least for a short period by altering some trade flows and potentially make producers in North Africa look for sales for June and July.

In the UK, the urea markets have seen some minor activity around reset levels, with up-take on forward offers in the £350s minimal. Growers should stay close to markets whilst the global markets balance out and potentially settle down as spot demand slows and tenders are fulfilled, and more information on supply and price direction are clearer.

Ammonium nitrate supply remains tight across the EU and UK, with respite only offered by a reduction in demand due to dry conditions. Levels have reset for the new season this week in France at €35 higher than last year. It’s unclear, but not unusual due to many factors, if the UK will be a premium or discount to this market or when a domestic price will be released. Stocks across the regions are low, with production curtailments in Europe either announced or already in place due to uncertain raw material costs over the next three months.

The European parliament is due to vote later this month on increased tariffs for fertiliser products that enter the EU and originate from Russia and Belarus. This is likely to come into play from 1st July 2025, then potentially increase each year. Product sourced from Russia into the EU in 2024 represented 30% of the total market. Add in the ongoing geopolitical situations and regional tensions growing, collectively it’s a very difficult market to predict, both from a financial and supply point of view. Growers should be prepared for reset ammonium nitrate prices in the UK to be published soon, but remain aware of the market factors.

Frontier has a nitrogen risk management tool to manage volatility in the market, so please keep in touch with your advisor as to the fertiliser market outlook.

• Liquid

As final applications of UAN draw to a close on cereal cropping, attention turns to the application of foliar products on both wheats and oilseeds targeting yield and quality. Applications on oilseed rape are at petal fall to support pod fill. With this timing imminent across large parts of the UK, product is available for prompt delivery to meet demand. Values remain firm and unchanged on bulk and IBC urea products aiming for protein uplift in milling wheats, with an increased interest from farms in recent weeks as growers secure volumes for delivery throughout this month. Whilst the priority lays with executing orders for crop ‘25, all UAN suppliers will have one eye on next season’s supply and be ready to react as and when the market begins to run in the UK, as detailed above.

• PKs/Straights/NPKs

Phosphate markets remain volatile. This is not only due to alterations in trade flows and increased demand, but also because with raw material and production costs, large tenders are still circulating in the market holding levels firm, so physical supply issues into the EU and UK remain but are improving. Some relaxation in Chinese export rules could help, but it remains unclear what volumes or timescale are being worked with.

The potash market is unchanged; some supply issues are visible into the EU and UK and all eyes are now on how the European parliament vote on tariffs for Russian and Belarus product later in the month. The UK doesn't buy Russian product, but the outcome of the EU vote could alter trade flows again and release more supply worldwide.

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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