WHEAT

Escalating tensions in the Black Sea remain the focal macro driver for global wheat markets. Ukrainian drone strikes on Russia's Novorossiysk port have disrupted operations at two major grain terminals, forcing them to halt activity. This raises significant concerns about the continuity of Russian wheat exports, which are vital to global supply as Russia is the world’s largest wheat exporter. Russian retaliatory strikes targeting Ukraine’s Izmail port have further compounded logistical challenges for Ukrainian exports, in effect limiting both nations’ ability to utilise traditional shipping routes. The market is now grappling with fears that prolonged disruptions could shift global demand to alternative origins. Although logistical constraints remain a key hurdle, the United States Department of Agriculture’s (USDA) report only reduced Ukranian/Russian exports by 2.5 million metric tonnes (mmt) to 59.5mmt, an export number that still seems highly unlikely.  

The USDA’s latest supply-and-demand report added further insight to this dynamic. Notably, the agency trimmed its estimate for US 2026/27 all-wheat production to 1.53 billion bushels (41.68 mmt), down from 1.54 billion bushels in July. Hard red winter wheat output was revised lower to 463 million bushels (12.6 mmt), which fell short of analyst expectations. Meanwhile, spring wheat crop conditions have deteriorated, with only 51% rated as ‘good/excellent’, down four points from last week. Harvest is progressing ahead of the five-year average at 24% complete. The USDA’s revisions are heightening concerns about US supply prospects, particularly as Northern Hemisphere harvests inject fresh grain into the market.

The price reaction has been bullish across major exchanges. On Chicago Board of Trade (CBOT), the benchmark wheat contract surged 3.6% yesterday to settle at $6.52 and three quarters per bushel, with September soft red winter wheat finishing at $7.20 and three quarters per bushel. Hard red winter wheat futures in Kansas City climbed by 3.1%, closing at $7.20 and three quarters per bushel. While Minneapolis spring wheat rose to $6.70 and a half per bushel. Euronext wheat also rebounded strongly, with the December contract up at €233.00/metric tonne (mt) and September futures up to €221.50/mt. London wheat’s November contract closed up £3.50/mt at £200.50/mt last night. These moves reflect increased risk premium tied to Black Sea export uncertainties and supportive USDA data. Despite the gains, broader market sentiment remains cautious. Analysts are flagging the potential for logistical improvements in the Black Sea to weaken prices, particularly as Russia, Ukraine and Romania are forecast to deliver the third-largest combined harvest on record.

Weak export demand in Western Europe continues to weigh on Euronext wheat, where port silos in France are reportedly full and traders are yet to see significant switching of demand from Black Sea origins. Additionally, Jordan’s repeated cancellation of wheat tenders signals sluggish international buying interest. In the energy markets, crude oil prices stabilised after hitting a one-week high earlier this week, as talks between Oman and Iran on reopening the Strait of Hormuz advanced. While grain markets often react to oil price movements due to biofuel linkages. The wheat complex appears to be more focused on geopolitical risks in the Black Sea and USDA data for now. With short-covering evident in both Chicago and Paris markets, traders appear to be positioning cautiously ahead of more clarity on Black Sea logistics and ongoing harvest updates.

BARLEY

• August World Agricultural Supply and Demand Estimates (WASDE) sees world barley production rise

USDA increased world barley production by 1.5 million tonnes in their August WASDE report, this is despite EU production being trimmed by 900,000mmt. The decline was more than offset by increases in the Russian and Ukrainian crop sizes, by 1mmt and 600,000mt respectively. However, these increases in crop size are clearly seeing a disrupted route to the market as attacks on port infrastructure and vessels continues, with the major Russian port of Novorossiysk a key target in the last week. The WASDE report suggests a decline of just 400,000mmt in Russian and Ukrainian barley exports from their July report. Ukraine’s own barley exports were placed at 2.2mmt in the WASDE report, whereas on Friday last week Ukrainian analysts APK-Inform stated they expected exports to fall to just 1.5mmt, part of a cut to wider grain export by 8.6%.

• Domestic feed buyers begin to return with feed barley competitive versus wheat

In terms of demand, Jordan have been in the market twice in the last two weeks for up to 120,000mmt of September and October barley. They have also passed on buying both last week and this week with a lack of offers and offers higher than buyers expectations and aspirations. They will return next week to try and buy. Domestically, this sentiment has been somewhat present too with consumers. In the market making enquiries and finding offers considerably higher than they would like. In the last week there has started to be some movement in that sentiment. As demand starts to pick up again, wheat discounts are typically £16-17/t, with smaller discounts in the South West and larger discounts in Scotland. Today, the domestic market remains stronger than current bid levels in the export market.

• Malting markets remain relaxed, whilst the Scottish spring crop starts to fulfil its potential

Malting markets have continued to meander as buying interest is still lacking any huge degree of purpose. In East Anglia a significant portion of the spring crop is either on the feed heap owing to high nitrogen content or never existed owing to poor yields. The South of England is mixed, but further North the spring crops are improving – both in yields and results. Into the Borders, spring yields and results are generally good as expected. It’s early days in the Scottish spring barley harvest, but the early signs remain strong.

OSR

Bearish

• Large global oilseed supply outlook remains the key headwind

The broad supply picture remains comfortable, particularly for soybeans and Canadian canola. Statistics Canada reported record Canadian canola plantings of 23.4 million acres for 2026, up 8.4% from last year. This provides a strong foundation for production, although final yields will depend on weather conditions. The combination of increased Canadian acreage, expanding domestic crush capacity and generally good North American crop prospects continues to cap the upside.

• European rapeseed crop is sizeable, but the outlook is less uniformly bearish than earlier expected

Harvest is progressing, while hot and dry conditions have reduced yield potential in parts of northern and eastern Europe. USDA's latest available EU estimate puts 2026/27 rapeseed production at around 20.5mmt, broadly unchanged year-on-year rather than substantially higher. This means the European supply picture is comfortable, but not an outright bumper-crop story.

• Crop optimism and lower energy prices are limiting rallies

Recent strength in Paris rapeseed has been partly offset by expectations of good Black Sea crops, crop optimism in North America and lower crude oil prices. AHDB reported November 2026 Paris rapeseed futures up 4% last week but noted that lower crude prices and strong crop expectations were limiting further gains.

Bullish

• Record-low Rhine water levels are becoming a more significant physical-market support

Extremely low water levels on the Rhine and other European waterways are restricting transport capacity and raising logistics costs. The disruption is particularly relevant for rapeseed, vegetable oils and biodiesel feedstocks moving into Germany and the Netherlands. This is increasingly supportive for nearby physical premiums and regional basis, even while futures remain constrained by the wider supply outlook.

• Black Sea vegetable-oil logistics have deteriorated materially

Russian and Ukrainian attacks on Black Sea and Azov port infrastructure are now directly affecting vegetable-oil flows. EFKO's Taman export terminal which handles around 1.5mmt of vegetable oils annually, has suspended operations following a drone attack. Industry estimates suggest Russian sunflower-oil exports could fall sharply in August, adding a meaningful risk premium to sunflower oil and the wider vegetable-oil complex.

• Chinese soybean buying remains a supportive demand signal

Chinese state buyers made a substantial return to the US soybean market in early August. Reuters reported purchases of around 1mmt in late July/early August, with USDA confirming nearly 0.5mmt of the business. AHDB subsequently reported that China booked 0.98mmt of US soybeans from private exporters during the week to 7th  August. This provides support to the wider oilseed complex, although the market remains cautious about whether the buying pace can be sustained.

View

• Supply remains bearish, but logistics are increasingly preventing the market from fully reflecting it

The fundamental backdrop is still one of adequate global oilseed availability, with record Canadian canola acreage and good soybean crop prospects providing a ceiling to prices. However, this is being increasingly offset in Europe by exceptionally low Rhine water levels and in the Black Sea by disruption to vegetable-oil export infrastructure. The result is a market where nearby physical values can remain relatively firm even if the longer-term futures outlook remains constrained by supply.

• Black Sea vegetable-oil exports are now the key geopolitical watchpoint

The risk has shifted from a general threat of disruption to evidence of actual logistical impairment. Continued attacks on Russian and Ukrainian port infrastructure could reduce sunflower-oil availability and increase freight and insurance costs, supporting sunflower oil and potentially spilling over into rapeseed and other vegetable oils.

• Demand is providing a useful counterweight, but not yet enough to overturn the bearish supply story

The recent surge in Chinese US soybean purchases is encouraging for global demand and has helped underpin the oilseed complex. However, the buying has been concentrated among state-linked buyers and is partly driven by attractive prices and forthcoming US-China political engagement, so it should not yet be treated as evidence of a sustained structural change in Chinese sourcing.

PULSES

• Feed Beans

Harvest has started in all parts of England. Yields are highly variable across regions and fields, with the prolonged dry weather and further heat adding to the risk of crops deteriorating rapidly. Reports from the wider arable sector are increasingly confirming the severity of the conditions, with some bean crops finishing significantly earlier than normal and yields well below expectations.

With harvest off to a disappointing start, sellers are understandably reluctant to commit significant volumes. Current market indications place UK feed beans at around a $10/t premium to Baltic beans. Given the current supply and demand outlook, there is an increasing expectation that UK feed beans could be consumed domestically rather than finding an export home this season. Export demand remains challenging, with alternative origins and protein sources providing strong competition.

• Human Consumption Beans

The Egyptian market remains well supplied, with substantial stocks still held in port storage. Australian origin continues to provide significant competition, with exporters carrying sizeable old-crop stocks and looking to clear these ahead of the new harvest.

Early UK crop samples are showing high levels of bruchid damage and significant surface smudging. Export opportunities for human-consumption beans are expected to remain limited, with only the highest-quality parcels likely to meet specification.

Quality segregation is likely to become increasingly important as harvest progresses. The combination of weather-related stress, bruchid damage and smudging means there could be a significant spread between food-grade and feed-grade values. Please continue to send samples to the labs as harvest progresses.

• Peas

Early new-crop pea samples are showing considerable variability. Heat stress is evident in many crops, with smaller and wrinkled peas commonly reported. Prolonged dry conditions and high temperatures are adding further pressure.

The latest reports confirm that the heat and drought are having a material impact on UK pulse crops. The exceptionally early harvest and reduced yields are making it increasingly difficult to assess the final size of the available crop, with considerable variation expected between regions and fields.

Overall, the pea market remains in a price-discovery phase, but the focus is increasingly shifting towards the actual size and quality of the crop available. Both buyers and sellers are waiting for harvest to provide a clearer indication of available volumes and specification before trading activity increases.

Quality will be particularly important this season. Growers and traders should also remain alert to pea bruchid damage, which has been highlighted as a new and potentially serious issue for the UK crop.

FERTILISER

• Global overview       

The global fertiliser market remains stable, particularly across nitrogen and phosphate products, while potash demand is steady with less price volatility. Supply chain disruptions, geopolitical risks, energy costs and strong import demand from key agricultural regions are continuing to support prices.

Major nitrogen producers report that global nitrogen supply remains tight due to production outages, elevated natural gas and energy costs, trade disruptions and strong import demand from India and Brazil . The most recent Indian tender is yet to be confirmed but cited at circa 1.7mt, this teamed with the uncertainty of the Middle East conflict will continue to provide volatility and impact physical supply of urea.

The phosphate market remains tight globally and the key challenges include restricted trade flows, limited sulphur availability, higher feedstock costs, reduced operating rates at some phosphate producers. It has already been reported that Lifosa, phosphate producers in Lithuania have suspended production across all product lines (including DAP/MAP) from the beginning of August until mid-September due to high sulphur costs. OCP, Moroccan producers who supply the UK, also reported that phosphate stocks are limited. Taking into consideration all of the above, phosphate prices likely to remain supported through the autumn application season.

Potash fundamentals are constructive with global demand continuing to grow, particularly in Asia and Latin America. Supply is generally more available than nitrogen or phosphates, helping limit extreme price increases.

• UK outlook

The main factors to keep an eye on over the next four to eight weeks are, gas prices in Europe (TTF price at €61, at time of writing ) a steady increase from last week’s Frontrunner report. Further Middle East supply disruptions, Indian urea tender and sulphur availability impacting phosphate production (as mentioned above).

Ongoing concerns around the Middle East supply routes and energy costs continue to underpin the global nitrogen sentiment. Frontier can offer the security of supply from of a range of products both solid and liquid. High-quality UK-produced AN and competitively priced UAN are available for September/October delivery, with autumn and spring tank fill options and a range of liquid and solid N and NS products. In terms of phosphates for OSR establishment, we can offer a portfolio of products to suit your system, please speak to your Frontier advisor to discuss the options available.

• Summary

Harvest progress has been rapid across most of the UK due to the dry summer and early harvest conditions, with mixed reports on yield depending on crop and geography. The biggest concern is the lack of rainfall from spring onwards, particularly across the East and South, where there is drought and multiple heatwaves. Poorer cereal yields are reducing cash generation on many farms, creating concerns regarding committing to fertiliser purchasing in the autumn. Our advice is to remain in close contact to your Frontier representative to discuss and plan ways to mitigate the risks posed to your business in terms of timing of purchase, cashflow, product advice and expertise to review your nutrient management strategy.

Please speak to your Frontier advisor 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.

This is a weekly report. Complete the form below to be added to the distribution for this market commentary.