WHEAT

The global wheat market remains firmly focused on the Black Sea region, where ongoing geopolitical tensions continue to disrupt grain shipments. Two cargo ships were struck by drones off the Bulgarian coast earlier this week, with one vessel sinking, further undermining hopes of stability in the region. These attacks are pushing global buyers to seek alternative origins, with European wheat benefiting from the shift in demand.

FranceAgriMer raised its 2026/27 forecast for French soft wheat exports outside the EU to 6.5mmt (million metric tonnes), citing reduced competition from Russian and Ukrainian supplies. However, Russian wheat exports via Baltic routes remain robust and the upcoming Southern Hemisphere harvest could add pressure later in the season. Turning to crop conditions, the United States Department of Agriculture reported that 51% of the US winter wheat crop has been planted, which is slightly behind the five-year average of 58%. Plantings in Kansas and Oklahoma are particularly lagging at 44% and 28%, compared to their averages of 56% and 48%. Meanwhile, in France, maize stocks are projected to fall to their lowest level in 36 years at just 1.1mmt, following severe heatwaves and drought that slashed yields. This has been reflected in the market dynamic for Euronext maize futures to a near four-year high, with November contracts closing at €303 per tonne.

Chicago Board of Trade (CBOT) December soft red winter wheat futures firmed by four cents to close at $6.74 and a quarter per bushel, supported by Black Sea supply disruptions. Kanas City December hard red winter wheat gained three and half cents to $7.15 and three quarters. While Minneapolis December spring wheat dipped slightly to $6.94 and three quarter. On the other side of the Atlantic, Euronext December milling wheat extended its rally, closing 1% higher at €248.25/t on Wednesday. Bolstered by Algeria’s significant tender, estimated at 700,000 tonnes, and a weaker euro enhancing EU export competitiveness. London’s November 2026 contract sits around the £206/mt (metric tonne) mark.

Despite the bullish sentiment tied to geopolitical risks and strong demand, some bearish factors remain. Analysts note that Russian wheat continues to flow steadily through Baltic routes, with 12.5% protein wheat offered in the low $270’s/mt free on board (FOB) for November shipment from St. Petersburg. Additionally, technical charts suggest CBOT wheat could face downside pressure, with potential targets in the $6.54 and a quarter to $6.59 and three quarters range, as traders eye resistance levels.

In summary, while Black Sea tensions and tight French maize supplies are fuelling near-term bullish momentum in wheat markets, ample Russian exports and looming Southern Hemisphere harvests could temper gains. Keep an eye on developments in the Black Sea and Algeria’s tender results, as these will likely dictate the next moves in global wheat pricing.

BARLEY

• Barley a possible replacement in the feed ration for EU corn deficit?

On Friday 9th October the USDA released their October World Agricultural Supply and Demand Estimates report (WASDE). The main development from the report was an increase in US corn yields and therefore a rise in US corn production of nearly 6 million tonnes versus the September report. This is not what the market was expecting, and subsequently the CBOT December 2026 corn futures contract fell by 34 cents (-6.75%) before rallying back to 20 cents down on the day (-4.1%) by Friday’s close.

To contrast, the WASDE report marked down EU corn production by over 2.5 million tonnes as the state of the heavily drought-affected crop has been realised. EU corn markets have moved upwards in the last week. Contrary to the US markets, as prices rose €16 (+5.8%) from Monday morning’s open to Wednesday night’s close on the Euronext March 2027 futures contract. A smaller EU corn crop does allow barley demand potential as replacement in the feed ration, although the WASDE report didn’t see any increase in EU barley consumption. EU corn consumption was decreased by nearly 2.5 million tonnes – begging the question, what will replace corn in the feed ration for barley to not see increased usage?

• Scottish barley area sees large decrease amid poor distilling and malting demand

On Thursday 8th October the Scottish government released its report on the latest Scottish Agricultural census, updating its final results on the Scottish Agricultural land use for the 2026 harvest. The total Scottish barley area dropped significantly year-on-year, down over 43,000 hectares on the 2025 harvest – a decrease of 14.7%. The 2026 barley area was also 14.5% below the five-year average. The winter barley area increased year-on-year by 3.5%, but it was in spring barley that the biggest decrease was seen. A 17.8% decline in Scottish spring barley plantings year-on-year, which is also a 17.4% decline on the five-year average. This is a stark reflection of the state of malting and distilling demand in Scotland today where supply has heavily outweighed demand and suppressed markets and prices. Planting intentions have shifted more towards winter wheat, a 5.8% increase in area year-on-year and oilseed rape, a 29.5% increase in area year-on-year.

FERTILISER

• Fertiliser market update: availability becomes as important as price

As attention increasingly turns towards spring 2027, the fertiliser market is entering a period where availability may prove just as important as price. Recent strength in global urea values highlights a market responding to rising production costs, tightening supply and growing concern over future availability.

Whilst UK urea values remain under pressure by existing inventories and scheduled imports, the wider nitrogen market is facing increasing cost pressures. European gas prices remain around 170% higher than they were in October 2025, significantly increasing the cost of ammonia production, the fundamental building block for all nitrogen fertilisers. Combined with reduced European fertiliser output and stock building ahead of the introduction of the UK Carbon Border Adjustment Mechanism (CBAM), the balance of risk continues to favour firmer prices rather than lower ones.

Against this backdrop, the market focus is gradually shifting away from whether fertiliser values can move lower and increasingly towards product availability, replacement costs and supply chain security. Current market prices remain below many replacement cost calculations, suggesting greater upside risk than downside as we move closer to the spring application season.

• Rising production costs continue to support the market

Natural gas remains the single largest cost component in ammonia production. As gas prices rise, so too does the cost of manufacturing ammonium nitrate and urea.

European gas markets continue to trade at historically elevated levels, maintaining significant pressure on fertiliser production economics across the region. At current energy prices, replacement costs for ammonium nitrate remain considerably higher than prevailing market values, indicating that today's fertiliser prices have yet to fully reflect the increase in manufacturing costs.

Adding further uncertainty, European gas storage levels remain below normal seasonal averages heading into winter. Lower inventories reduce the market's ability to absorb periods of cold weather, liquified natural gas (LNG) competition or further geopolitical disruption, increasing the risk of additional volatility in energy markets over the coming months.

• European supply remains under pressure

Alongside rising production costs, supply availability across Europe continues to tighten.

Several fertiliser manufacturers have reduced operating rates or undertaken planned maintenance programmes at a time when the market would typically be building stocks ahead of spring demand. At the same time, disruption to global trade flows, particularly through the Strait of Hormuz, continues to create uncertainty around the movement of ammonia and fertiliser products.

The result is a market where production is being constrained just as future demand requirements remain significant. Importantly, tonnes lost through production curtailments today cannot be recovered later in the season.

European producers are also increasingly focused on supplying domestic demand, limiting export availability and reducing the number of import opportunities available to the UK market.

• UK market supported but below replacement cost

Within the UK, urea values have remained relatively stable despite strengthening global markets. Healthy inventories at UK ports and scheduled vessel arrivals have continued to provide some balance, helping domestic prices remain below replacement cost levels.

However, this support should not be mistaken for weakness in the underlying market. International values continue to strengthen, energy costs remain elevated and suppliers are actively positioning stocks ahead of CBAM implementation on 1st January 2027.

Uncertainty surrounding future CBAM costs means many suppliers remain reluctant to offer significant volumes of solid fertiliser beyond Christmas. As a consequence, liquid fertiliser remains the only widely available forward purchase option for spring 2027 delivery, giving growers an opportunity to secure both tonnes and delivery capacity well in advance of peak seasonal demand.

The recent rise in global urea values suggests international nitrogen markets are beginning to reflect higher replacement costs. Whilst UK prices have yet to fully reflect these higher production economics, the imbalance between current values and replacement costs leaves the market increasingly exposed to upward pressure.

• Availability and delivery are becoming critical

One of the most significant changes in the market over recent weeks has been the increasing importance of availability.

Supply concerns are no longer solely about price. November nitram volumes are becoming increasingly committed, with the market steadily moving towards December positions. Reduced European production, maintenance shutdowns and tighter ammonia availability continue to constrain supply at a time when many growers are still carrying significant uncovered requirements.

Should purchasing activity accelerate over the coming months, competition for both available product and delivery capacity is likely to increase sharply.

Experience has shown that when buying becomes concentrated into a shorter period, logistics can become just as important as supply. Securing tonnes is only part of managing risk, ensuring product is delivered and physically on farm removes a significant element of uncertainty ahead of spring demand.

• Outlook

The market's direction of travel remains increasingly clear. Production costs are rising, European supply remains constrained, import opportunities are limited and many growers still have fertiliser to purchase.

Whilst no market moves in a straight line, the overall risk profile appears increasingly weighted towards firmer prices, tighter availability and greater pressure on delivery capacity as spring 2027 approaches.

For growers with outstanding requirements, the market appears increasingly unlikely to reward delay. Securing product, securing delivery and managing supply chain risk are becoming every bit as important as achieving the lowest possible purchase price.

Our recommendation remains unchanged: where practical, growers should aim to have at least 75% of their spring 2027 nitrogen requirements secured and taken delivery before Christmas.

Please speak to your Frontier advisor to review your fertiliser requirements and discuss the options currently available.

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.

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