WHEAT

The wheat market remains heavily influenced by geopolitical tensions in the Black Sea region, where attacks on shipping have nearly paralysed grain exports from Ukraine and Russia. Ukrainian agricultural exports in the first half of August totalled just 794,000mt, a sharp drop from July’s 3.67mmt and consultancy, ASAP Agri, warned that Ukraine’s wheat exports could go as low as 5–10 million metric tonnes (mmt) for the 2026/27 season if port blockages persist. Russian exports are also under pressure, with shipping disruptions reducing capacity at Novorossiysk and other key hubs. The escalation in strikes between the two major exporters is driving global price volatility, as importers in regions such as the Middle East and Africa face higher-cost alternatives like US and Australian wheat.

This backdrop is providing support to wheat futures despite mixed signals elsewhere. Crop conditions in the US Midwest continue to weigh on market sentiment, with the United States Department of Agriculture (USDA) recently lowering its condition ratings for corn and soybeans. The Pro Farmer crop tour highlighted weaker yield prospects in South Dakota and Ohio, with soybean pod counts and corn yields below both last year’s levels and the three-year average. While wheat itself remains largely unaffected by these specific ratings, the broader theme of reduced US crop health is underpinning agricultural markets, particularly as demand signals remain strong. In the Southern Plains, temperatures above 38°C are stressing hard red winter wheat crops, but farmer selling remains limited as most of the harvest has already been sold. The price action across major wheat contracts reflects these dynamics.

In Europe, Euronext wheat saw similar bullish momentum, with December contracts rising 0.9% to €237.75/mt, the highest level in over two weeks. London wheat futures have followed suit climbing to a near contract highs on Thursday 20th August to £213.50/mt for November 2026. The November 2026 to May 2027 spread has been closed to ~£6.00/mt. However, traders noted limited evidence of importers actively switching to alternative origins like French wheat, suggesting buyers may be waiting for a possible de-escalation in the Black Sea. French wheat quality is emerging as a positive story, with FranceAgriMer reporting above-average milling results for this year’s soft wheat harvest. However, EU soft wheat exports have started the season sluggishly, down 49% year-on-year at 1.48 mmt as of mid-August. In Germany, the winter wheat crop is forecast to drop 7% to 20.9mmt due to a dry spring and record-breaking heat in June. These issues add further uncertainty to the European export picture, which could tighten global availability if Black Sea disruptions persist.

Overall, wheat markets are navigating a tug-of-war between bullish Black Sea supply risks and bearish technical signals. Analysts note that Chicago Board of Trade (CBOT) September wheat futures could retest support levels near $6.60 and three quarter per bushel, reflecting a cautious outlook on global availability. However, with geopolitical risks showing no signs of easing, traders are keeping a close watch on developments in the region, as any further escalation could trigger another wave of price increases.

BARLEY

• Domestic feed market firmness continues to trump export markets

Export markets have started to show signs of rising in the last week as Baltic origins start to act as Black Sea replacement in the market alongside Romania. Baltic origins such as Poland have consistently been cheaper than the UK into Ireland and North Spain this marketing year so far. Although export demand is improving, it still has some way to go before it can compete with the strong domestic market, which continues to follow wheat prices. Feed consumers have taken further cover in the last week, with some still operating nearby and some buying cover towards winter rations out to April. In the Southwest of England, the discount to wheat is narrowing as a combination of poor crop yields and concerns over forage stocks holds a heavy influence on the market. Winter feed stocks being fed now is reported as common with very little fresh grass available for grazing in the Southwestern region.

• Scottish spring barley rain delayed but showing promise

Spring barley has continued to find its way into the feed book in the last week, as nitrogen levels continue to be variable but are generally trending higher, particularly in East Anglia. The Scottish spring barley harvest has been disrupted by rain, but these are conditions this market is used to where harvesting spring barley can often run throughout September. For some in the North of Scotland spring barley harvest remains at least a week away, while those who have started harvesting have found results and yields promising as expected. Buyers are optimistic that a strong Scottish crop will help offset weaker crops further south, while the market continues to assess the challenge of moving surplus malting barley from the North to meet demand in the South. Buyers remain very relaxed amid a continuation of suppressed demand and large carryover stocks available and, yet buyers are in no hurry to change any English intake parameters to stop malting varieties from hitting the feed heap.

OSR

Bearish

• Global oilseed supply remains the fundamental ceiling

USDA's August outlook increased 2026/27 global oilseed production to a record ~721mmt, around 20mmt above 2025/26. Global crush was also raised, while ending stocks were left broadly unchanged. This confirms that the underlying global balance remains comfortable and limits the scope for a sustained futures rally.

• Record Canadian canola acreage remains a major supply headwind

Statistics Canada's 23.4m-acre 2026 planting figure still provides a substantial production base. Recent Canadian weather has been more supportive, with cool temperatures and rain improving conditions for crops still in pod-fill. This reduces the immediate likelihood of a major Canadian supply shock.

• US soybean crop prospects remain sufficiently strong to cap upside

While the US crop is not without weather risks, the broader production outlook remains large. The latest market commentary shows improving moisture levels across parts of the Corn Belt. However, the Pro Farmer tour found soybean development to be weaker than expected in some areas of South Dakota and Ohio. Therefore, the crop remains a key watchpoint rather than an established bullish driver.

Bullish

• Dry conditions are also creating a risk for the 2027 European crop

AHDB reports growing concerns over dry soils ahead of winter rapeseed planting in both Europe and Ukraine. Ukraine's normal optimum planting window is 10th – 25th  August, making the current lack of moisture particularly relevant. This is becoming an increasingly important forward-looking support for the 2027 crop rather than just a 2026 harvest issue.

• The Rhine situation has escalated

Water levels at Kaub fell to 11cm on 13th  August, with forecasts of 6cm. At these levels, most barge traffic south of Mainz is effectively halted and ARA-to-Rhine freight rates have reached record highs. The German waterways authority subsequently recorded only 8cm at Kaub on 15th August, confirming how extreme the disruption has become. This is strongly supportive of nearby European rapeseed, vegetable oil and biodiesel feedstock basis.

• Black Sea disruption is becoming a much more important oilseed/vegetable-oil risk

AHDB reported another week of support to oilseed prices from the risk to rapeseed and sunflower seed exports caused by the conflict. The broader disruption is now affecting commercial shipping and port infrastructure, not simply creating a theoretical risk premium.

• Chinese US soybean buying remains a supportive demand signal

China bought around 1mmt of US soybeans in early August, with state buyers taking advantage of lower prices. The buying is supportive, although it still looks partly price-driven and should not yet be interpreted as a permanent change in Chinese sourcing.

View

• The bearish supply story remains intact, but the market is becoming increasingly difficult to trade from the supply side alone

Record global oilseed production and large Canadian/US crop prospects provide the medium-term ceiling, but severe Rhine restrictions and Black Sea export disruption are creating increasingly strong nearby physical support.

• The Rhine is arguably the most immediate physical-market bullish factor

At current water levels, the issue is no longer simply higher freight costs: parts of the Rhine network are effectively inaccessible to normal barge traffic.

• Black Sea disruption is now the key geopolitical watchpoint

FERTILISER

Another quiet week in the UK nitrogen market, with demand remaining very limited across the southern half of England. Activity is slightly better in the North and Scotland, but overall volumes remain well behind what would normally be expected for mid‑August, with growers continuing to assess crop establishment and weather conditions ahead of purchasing decisions.

The key focus this week is the June import statistics, which give us the first real indication of whether the UK is quietly building stocks ahead of the heavy September–December period before the Carbon Border Adjustment Mechanism (CBAM) comes into force. Unfortunately, the data points the other way as imports of all N and NS products were down versus June last year, and well below June 2024, suggesting no meaningful stock build so far.

We won’t see July import figures until early September, but the market view is that July was also a low‑import month. With farm demand subdued, a nervous and low‑risk supply chain is unwilling to take product without clear forward movement. Deliveries in the first two months of the fertiliser season are well back, which risks pushing the logistical pressure further down the line. This is mirrored across UAN where UK supply is heavily reliant on imports and international shipping. Suppliers are carefully managing stocks and vessel schedules in expectation of increased demand through Q4, and therefore deliveries from port into on farm storage. Widespread rainfall will trigger renewed interest and demand for those with storage capacity for tank fill, either existing UAN users or those growers converting to liquid fertiliser systems for the coming season.

The working assumption in the market is that we are only around 50% through what would normally be ordered by this stage of the season. That leaves a very heavy September–December window, with CBAM adding further complexity.

European gas remains the defining issue for nitrate producers. Gas is still trading above €60/MWh, roughly double the level seen at the same point last year. This continues to underpin high replacement costs for AN and CAN, limiting the ability of European producers to adjust pricing meaningfully. With this in mind, UAN suppliers look further afield to source product to avoid the high raw material costs on the continent whilst still securing delivery into portside storage ahead of the New Year.

Urea producers around the world are now coming to terms with the outcome of the recent Indian tender. China absorbed the majority of the awarded volumes, leaving September order books thinner than most producers would like. This has created a more cautious tone across global nitrogen markets, particularly with ongoing conflict in the Middle East keeping nerves high around raw material supply and shipping reliability.

Demand for urea will inevitably return, and the small dip we may see over the coming days could easily prove to be the final softening before the market begins building towards Q1 2027. UK urea offers are certainly one to watch closely. With rainfall now arriving across parts of the country, demand could pick up quickly  and with UK stocks extremely low, replacement values will feed through faster than normal. Any increase in farm buying will immediately expose the tightness in the supply chain.

Volatility remains the dominant theme. Global producers are recalibrating after the tender, freight markets are still sensitive to geopolitical risk, and the UK’s low stock position means price moves will be sharper than usual. Growers should stay close to their Frontier contact as we move through this period. The next few days could set the tone for early autumn buying, as well as renewed interest in spring UAN terms, which are available for those looking to secure product and reduce their risk in this uncertain marketplace.

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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