WHEAT

• USDA January update highlights heavy crops

The world’s cereal markets were in continual decline throughout last year and at best have moved sideways since the start of 2026. On Monday this week, the United States Department of Agriculture (USDA) added another heavy burden to those markets when it published its January World Agriculture Supply and Demand Estimates (WASDE) which proved to be full of bearish data.

For wheat, the negative updates were expected, with world production up by 4.4 million tonnes to a record 842 million, more than 41 million up on last year. The adjustments come from higher estimates for Argentina, which is up from 24 million tonnes last month to 27.5 million, a staggering 49% increase on last year.

Russian production increased by 2 million tonnes to 89.5 million tonnes. World demand is up 1 million tonnes to 823.91 million tonnes, which takes end stocks up to 278.25 million tonnes, 18 million tonnes up on the year and the highest in five years.

Adding to the wheat market negativity, US 1st December wheat stocks were 1.675 billion bushels, above trade estimates of 1.636 billion. The 2026 US winter wheat planted area is 32.990 million acres, above trade estimates of 32.413 million acres

In the lead up to the report, there was talk there of a cut to 2025 crop US corn yields. However, the USDA delivered a shock, increasing US corn yields up to a record 186.5 bushels per acre. Furthermore, the harvested area was revised higher, from 90 to 91.3 million acres. That took the US corn production up by 6.8 million tonnes to 432.2 million - 54 million up on the year.

An increase for China’s production, up by 6.24 million tonnes, leaves world production up 13 million tonnes on last month’s estimates and 65.5 million tonnes up on the year. World end stocks are up almost 12 million tonnes on last month at around 291 million tonnes, although this is still 2.5 million tonnes down on the year.

The Chicago Board of Trade’s (CBOT) corn futures dropped 5.4%, the biggest daily change for the contract, leaving it just above the contract lows hit in mid-August last year.

• Mixed weather issues

The 2025-26 world wheat and corn balance sheets are heavy and bearish, but there are potential weather issues that could compromise the outlook for the 2026 Russian crop. Temperatures dropping to between -20°C to -27°C could prove damaging for winter wheat where snow cover is minimal if the low temperatures persist for a week or more. However, from a wheat exporter point of view, another area of concern is beneficial weather in North Africa. Morocco declared the end to a seven-year drought, with winter rain 95% up on last year and 17% above the seasonal average. This could result in a strong wheat harvest and lower import needs. Morocco is the EU’s highest wheat importer this season, taking almost 2.2 million tonnes so far according to this week’s EU official numbers which is more than double the next highest taker, Saudi Arabia.

BARLEY

• Feed barley demand slips as outside influences bearish

The USDA’s monthly report produced a bearish report on corn (maize) by increasing the crop size and other corn producing countries by smaller amounts, causing a 6% price drop within a matter of hours.

The USDA report is likely to send buyers to the side lines in the short term. There will be merchant shorts that need to buy barley in February and March, as well as feed compounders that will need top ups if sales go well, but most interest will be for April onwards now. As feed wheat and maize prices edge lower, barley’s discount to wheat becomes increasingly smaller, making demand potentially smaller too, so this is something to keep an eye on.

• New crop feed barley prices look high when compared with feed wheat.

There is a limited trade in harvest ‘26 supplies. Buyers purchase small amounts and have to pay relatively small discounts to wheat, as farm selling is non-existent because values are perceived at lower than the cost of production and most of the crop (the spring barley portion) is some way from being sown yet.

• Malting barley trade remains subdued

There has been very little trade since last week as maltsters don’t have much left to buy (maybe 10%) of their brewing malt needs. Distillers are fully covered and will still be using crop ‘25 barley in the spring of 2027 by the looks of it. However, crop ‘26 barley supplies for brewing malt are only partially covered, as brewers prefer to see how beer sales develop in the spring before buying a further percentage. Interestingly, Easter can be nearly as big as Christmas if the weather is conducive to high market demand.

OILSEEDS

Rapeseed markets over the last week improved after a rocky period leading up to Christmas, with MATIF rapeseed futures values moving €22 higher. The improvement has largely been driven by technical buying and a lack of fund selling as markets rebounded from recent lows, alongside a firmer tone across the wider vegetable oil and energy complexes. Strength in crude oil has offered indirect support, reinforcing expectations for stable biodiesel demand and underpinning rapeseed oil values.

From a fundamental perspective, demand-side signals have been cautiously supportive. European biofuel policy continues to provide a structural base for the use of rapeseed. But in North America, there has been renewed market discussion around soybean and canola export demand, particularly linked to the outlook for Canadian canola shipments to China. Although no material policy changes have been confirmed, improved expectations alone have been sufficient to encourage speculative and short-covering activity.

Supply fundamentals remain mixed. Global oilseed balances are still viewed as relatively comfortable, with ample availability limiting the scope for an aggressive rally. However, some uncertainty persists, with logistics, whether seed can get to demand points in sufficient quantities, and time all a concern. This is why we’re seeing such strength in nearby prices with little to no carry in the market.

Overall, the rapeseed market over the past week has been characterised by short-term recovery rather than a shift in longer-term fundamentals. While near-term momentum has improved, further improvements will depend on clearer signals around export demand, biofuel policy developments, and broader oilseed market direction.

FERTILISER

• AN/Urea

Only a couple of weeks into the new year and the challenges facing the fertiliser supply chain are already clear as the geopolitical landscape remains difficult to navigate.

Since December, the US has entered conflict with both Venezuela and Iran. Iran alone produces around 9 million tonnes of urea annually, with approximately 4.5 million tonnes exported to global markets. Venezuela sits only a short distance from Trinidad, a major producer of ammonia and UAN, both important sources of product for the UK. Any disruption in this region has the potential to influence global nitrogen flows.

Energy markets are also reacting. European gas prices have moved from a pre‑Christmas low of €26 to above €33 today, and this remains a key watchpoint for production economics and pricing direction.

Closer to home, CF Fertilisers has realigned prices to stimulate demand following the natural slowdown over the Christmas period. With only 32 delivery days remaining until March, maintaining product movement is essential as we head towards what could be another challenging spring logistics window.

Import data suggests similar volumes of AN and urea arriving compared with last season. However, cropping data points to a larger market overall, meaning demand could outpace last year’s levels.

Frontier has Nitram available for delivery in January, February and March. Please speak to your advisor for product availability, pricing and delivery planning.

• Liquid

As the delivery window narrows ahead of nitrogen applications, UAN users continue to have access to a full portfolio of N and NS grades available for prompt delivery into on farm tank storage. Those with tank capacity ahead of usage, or those with additional known requirements for the spring season, are encouraged to discuss their requirements with their local Frontier advisor. In light of recent changes to the cost of UK manufactured AN, UK UAN suppliers have revised their terms into the marketplace to continue to offer competitive value on a p/kg N perspective against solid AN, N and N/S based systems. Cereal, root, or forage growers looking for quality NP and NPK products for placement or broadcast application have access to 100% water soluble products for delivery in either bulk or IBCs.

• PKs and straights

Like the nitrogen market, PKs are also waiting for a meaningful lift in demand. That said, several UK blenders are already planning February production on the back of strong December order books, so the pipeline is beginning to move.

The main story this week centres on sulphur availability. A major sulphur supplier in Germany has entered insolvency, and product from those sites has historically supplied the UK. This development has the potential to tighten supply and influence pricing in the weeks ahead.

More broadly, sulphur prices are firming and when combined with higher ammonia values, this points towards upward pressure on DAP. While DAP remains flat in the UK today, last spring showed how challenging it can be to keep this raw material stocked. Freight dynamics and competing European demand can quickly make supply difficult.

Our advice is to review PK requirements now. The downside risk is limited, but the risk of delayed delivery later in the season is very real.

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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