WHEAT

• US harvest forecasts underpin global price surge

Wheat markets experienced a sharp rally this week, driven by the United States Department of Agriculture's (USDA) projection of a 54-year low for US wheat production in 2026/27. The USDA pegged total US wheat output at 42.5 million metric tonnes (mmt), well below the previous year’s 54.0mmt and below average analyst expectations. Hard red winter wheat, the key bread-making variety, is forecast to fall to 14mmt, the lowest since 1957,due to severe drought in the southern Plains. Chicago Board of Trade (CBOT) and Kansas City (KC) wheat futures both hit their daily trading limits, with KC July contracts closing at $7.31 ¼ per bushel, a contract high.

The implications of this tight US supply picture extend globally, with Euronext milling wheat futures in Paris climbing 4% to €216.50 per tonne for September delivery. This rise reflects heightened concerns over exportable surpluses from the US, a major global supplier. For UK growers, the tightening of global supply adds upside potential to domestic prices.

• Geopolitics and energy markets add further support

Heightened geopolitical tensions in the Middle East are amplifying cost pressures in global wheat markets. The closure of the Strait of Hormuz due to escalating conflict between the US and Iran has driven Brent crude oil prices above $110/barrel. Rising energy costs are filtering through to fertiliser and transportation expenses, compounding the challenges faced by producers in drought-affected regions. These dynamics are also influencing wheat prices, as biofuel margins and shipping rates become more expensive. In Europe, a weaker euro has provided additional support to grain exports but improved North African harvest prospects may limit demand for EU wheat in the coming months. Morocco, for instance, has announced a suspension of soft wheat imports for June and July, citing a domestic harvest expected to double to 9mmt following favourable weather.

• UK market steady amid mixed global signals

Domestically, the UK wheat market remains firm. Tight old-crop stocks and late season feed demand is supporting values, but growers are increasingly cautious about forward sales due to volatile input costs. Recent rainfall has improved crop conditions in key UK growing regions but has been localised with some areas missing out more than others. Uncertainty over global supply chain disruptions and energy markets remains high. With US crop prospects deteriorating and geopolitical pressures driving input costs higher, the wheat market is likely to see sustained volatility. London’s International Financial Futures and Options Exchange (LIFFE) November ‘26 wheat futures contract is hovering around £190/t today.

Further updates on US weather, crop ratings and export data, the war in the Middle East and the Brent Crude price will be closely watched for directional cues.

BARLEY

• Old crop markets quiet and drift lower

Old crop feed barley values have drifted lower on the week as fresh consumer demand declined in the first half of May which combined with lack of old crop export demand does little to help prices. Ireland are now well-covered and replacement levels unattractive for further buying.

• Wet weather returns for UK crop, more needed for many

In the last week, rainfall has returned for the UK and wet weather remains in the forecast. For East Anglia in particular, crops still need more rain and the market will be looking for an improvement in the UK crop conditions, particularly spring barley. The concern will be if the damage has already been done and whether yield potential will struggle to recover fully.

• New crop values rise on bullish May

In contrast to the wheat production falls, barley production is due to rise by over 0.8mmt globally. Major production origins such as Australia, Canada, the EU and Russia are reported to fall, but marked improvements in production from typically import areas offset this. Barley production in North Africa, Turkey, The Middle East and India are forecast to rise by a total of 7.8mmt, and spring rains in Turkey and Morocco have boosted their crop prospects by 3.2mmt and 1.45mmt respectively. The Turkish and Moroccan production forecasts will be of concern for EU and Black Sea exporters alike as they would typically import destinations for barley from both origins. The 2026/27 exporters will have to cast their line out further afield in search of demand in a high-freight cost environment.

OSR

The UK oilseed rape market experienced mixed dynamics this week. Paris rapeseed futures hovered within the €440-450/t range, supported by EU biodiesel demand under RED III and geopolitical tensions near the Strait of Hormuz. Brent crude’s recent breach of $110/barrel has bolstered biofuel margins, lending global support to the oilseed complex. However, abundant global oilseed supplies, particularly record South American soybeans, continue to exert downward pressure.

Domestically, winter OSR hectarage rebounded 30% year-on-year to 316,000 hectares, marking the strongest recovery since 2023. With 82% of the crop rated ‘good/excellent’, prospects remain favourable. Adequate rainfall in the coming weeks will be critical for maximising pod-fill potential.

Globally, Canadian canola stocks remain tight, while reduced Australian exports provide some bullish sentiment. However, record EU rapeseed production, forecast at 19.6mmt, is easing import demand, keeping European crush margins robust. Meanwhile, sterling’s recent rally to 1.36 against the dollar has moderated UK import costs for alternative oilseeds, though stable GBP/EUR parity keeps French and German rapeseed competitive. Volatility remains a key challenge for growers and processors.

FERTILISER

• Cost of production value adjustment

The French market has released offers that are reflecting a lower cost of production and a reduced farm price, some of these offers are reflected into the UK market. Importers are gauging the demand and the risk associated on bringing vessels across. Major UK importers have released a limited volume on a limited product range. If you have a known specific product preference, the advice would be to consider the current offers in the market and their origin. Attention should be paid to when the delivery offers are available for, as something that is prompt delivery is most likely old stock, whereas something that is June/July only, is likely indicating new fresh stock. This is of upmost importance when it comes to storage quality of nitrogen sulphur products, but less of a problem for nitrogen materials. Additionally in a market where cost of production is more of an unknown for a AN manufacturer, buyers should be more conscious of where the products originate from rather than specifying, for example, a 34.5% AN. As we have seen some eastern Europe AN producers have consistent years of poor financial performance, adds a risk to their future production and committed buyers of their materials.

Following these offers into the French market, values have already stepped up. This likely indicates that current revised offers in the UK will be short lived. At time of writing, there is no change on pricing from UAN (Liquid) manufacturers or domestic production of AN which puts them both at a premium over current imported nitrogen offers.

Adjustments in production costs have increased the foliar products used within OSR (Nutrino Pro), Milling wheat (Multi N) this has been more down to demand of these materials. As growers continue to buy, producers are having to buy replacement raw materials five  months after their original purchase period within a comparably more expensive spot market, as demand for usage is now or very soon. Even with minor price increases, all these materials still demonstrate significant margin over input cost.

• System comparison

With varied N and N/S options in the market we would encourage you to take note that there is £20-30/ha difference across system costings when comparing all nitrogen sulphur fertiliser options today, it is more important than ever to discuss these options for your investment into crop 2027.

• PKs

Buyers of Polysulphate should consider covering tonnage, given the flexibility the product option gives on cropping rotation, it allows to buy your nitrogen inputs freely based on £/kg/N and availability. The sulphur market is impacted due to the disrupted sulphuric acid supply coming through the Middle East and given Polysulphate levels are similar today to where they were 12 months ago, it is better to have secured tonnage now in readiness for usage in the Spring. Lastly, those buyers of NP products for OSR should consider purchasing over the next month as the slight weakness in nitrogen pricing will not bring DAP down due to the premium in sulphuric acid (used in phosphate production).

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.