WHEAT

Wheat markets remain firmly supported by escalating geopolitical risks in the Black Sea region. Renewed attacks on Ukrainian ports and grain infrastructure by Russian forces, including missile strikes in the Odesa and Chornomorsk regions, have heightened supply concerns. The closure of Russia’s Novorossiysk port to vessel movements during nighttime hours following Ukrainian drone attacks has added to the tension. With Novorossiysk handling roughly one-third of Russia’s grain exports, any disruption there has the potential to significantly impact global wheat flows. Traders are also noting rising freight insurance costs for vessels operating in the Black Sea, further complicating logistics.

Adding to the bullish sentiment, crop conditions in the US are under pressure. The first day of the North Dakota crop tour reported an average hard red spring wheat yield of 46 bushels per acre, down 8% from last year and only marginally above the five-year average. Meanwhile, Germany’s wheat harvest is progressing, but heatwave damage could reduce output by 600,000 to 1 million tonnes year-on-year. The SovEcon consultancy has revised its Russian wheat crop estimate lower to 88.3 million metric tonnes (mmt), citing weaker conditions in southern regions and a smaller spring wheat area. These factors collectively underscore tightening global supply prospects.

Chicago Board of Trade (CBOT) wheat surged to two-year highs, with September futures closing at $7.05 three quarter per bushel, up 27 and three-quarter cents on the day. Kansas City hard red winter wheat also saw strong gains, ending at $7.63 and a half, while Minneapolis spring wheat climbed to $7.29. Paris milling wheat followed suit, with September futures rising 3.9% to settle at €244/tonne, driven by both Black Sea disruptions and speculative buying. Over the past fortnight, Paris wheat has rallied nearly 20% as traders reassess risks to European and global supply chains. London’s November 2026 wheat futures contract has rallied from approximately £178 early July to £206 today, a 15.7% increase in a few weeks.

Crude oil markets are also lending support to agricultural commodities with spot Brent crude oil at $94/barrel. Rising energy prices, fuelled by Middle East tensions and supply disruptions, are bolstering demand for biofuel feedstocks like wheat, corn and soy. This dynamic is contributing to firmer soybean and corn prices, with CBOT soybeans up 15 and a quarter cent to $12.39 per bushel, while corn added nine and a half cents to $4.8 and three quarters. Looking ahead, weather concerns in the US Midwest and Plains will remain a critical factor. Heatwaves forecasted for next week could further stress crops, particularly for corn and soybeans. Combined with the ongoing Black Sea conflict, the market is pricing in significant risk premiums, and volatility is likely to persist in the coming days/weeks.

BARLEY

• Grain rally continues, with barley markets rising too

The rally in wider grain markets has continued as influences from the ongoing conflict between Russia and Ukraine drive futures markets up. Attacks have continued at volume from both sides, and most notably to grain markets was a strike on a barley vessel just outside the Ukrainian port of Odesa on Tuesday. The market hasn't reacted as aggressively as it did when the war started in 2022. The market has seen this before and found a way to cope. Although this will take time and will likely carry added expense. In the meantime, export demand is being shifted towards alternative sources such as Romania, Germany and the Baltics.

• UK harvest continues at pace while consumers sit out of the rally - for now

The UK barley market has moved up amid the rally, although consumers are doing as little as they can while they hope for a reversal in the increasing values. Some have reasonable cover on already, certainly for their winter runs through to April. Other consumers are covering what they need to spot, while many still have plenty of business to do moving into the Autumn and beyond.

Dry weather offers no barriers to a strong harvest pace, so progress has remained strong. Winter barley harvest has pushed well into Scotland. With most of the crop already cut South of Edinburgh, and early cut winter barley as far North as Aberdeenshire. Further South into England, Spring Barley is being cut which is coinciding with the oilseed rape and winter wheat harvests. As expected, early yields in East Anglia have been poor as drought-affected crops failed to produce a significant number of grain sites. With the crop also being short, it is unsurprising that nitrogen levels are generally high and too high for the malting market. As a result, the early signs on spring barley harvest suggest a smaller yielding crop, where a good portion will be destined for the feed bin. However, this is before considering that spring crops, though many parts of Yorkshire, the Borders and North of Scotland, did receive rain and crops reports have been more positive. The market continues to watch with interest.

OSR

• Large global supply outlook continues to dominate market fundamentals

 The global rapeseed/canola production prospects remain historically strong despite some regional weather concerns. Overall, global supplies remain sufficient to prevent concerns over outright shortages.

• European harvest has begun with generally favourable yield expectations

While recent heat has trimmed some sunflower and rapeseed production estimates, the EU crop remains substantially larger than last season. Attention has shifted from crop development to harvest quality and logistics.

• Global vegetable oil supplies remain broadly comfortable

Despite weather concerns, expanding oilseed production and health crush margins continue to support adequate availability across the complex.

• Chinese demand continues to underpin market sentiment

Chinese import demand for oilseeds remains robust, with the reopening of Australian canola imports demonstrates continued appetite for rapeseed products.

• Chinese buying of US soybeans has strengthened market sentiment

Recent purchases of US soybeans by China have provided support across the wider oilseed complex. Improved demand from the world’s largest importer has helped underpin soybean prices, which in turn has offered spillover support to rapeseed and canola markets.

• Geopolitical tensions continue to support crude oil prices

Renewed concerns over disruption to shipping through the Strait of Hormuz have added a risk premium back into energy markets.

• Market sentiment has become more balanced

While the prospect of another large global rapeseed crop continues to limit upside potential, renewed support from energy markets and stronger Chinese demand have improved the overall tone.

• Energy remains a key driver over the coming weeks

Crude oil prices are likely to remain sensitive to developments in the Middle East.

FERTILISER

• Fertiliser market volatility returns

Just as fertiliser markets appeared to be finding some stability, a fresh escalation of tensions in the Middle East has brought volatility sharply back into focus. Rising oil and gas prices, concerns surrounding shipping through the Strait of Hormuz and renewed global demand for urea have all combined to strengthen market sentiment and push prices higher.

Urea markets have rallied significantly in recent days, with values increasing by around $150/t. Strong purchasing activity from Europe and the United States has supported North African urea prices, the key benchmark for UK imports. Producers in Egypt and Algeria have reported substantial increases, prompting suppliers across the UK market to either raise prices or temporarily withdraw offers while reassessing replacement costs.

• UK market moving higher

Recent price adjustments on domestic nitrogen and Yara fertilisers initially stimulated strong buying activity, as many growers took the opportunity to purchase what they believed could be the market low point. However, sentiment has changed rapidly.

Domestically produced ammonium nitrate is now being offered at approximately £40–£50/t above previous levels and remains limited in volume available. Liquid fertiliser prices have also strengthened, reflecting growing uncertainty across both global and domestic supply chains.

While harvest activity has naturally reduced purchasing momentum in the short term, the market is showing increasing signs that values are today trending higher rather than lower. Suppliers remain cautious and replacement costs continue to rise, creating a firmer pricing environment.

• Why the market remains fragile

Several factors continue to underpin fertiliser prices and reinforce the market's vulnerability to further volatility.

Nitrogen fertiliser markets have come under renewed pressure as higher production costs, logistical challenges and stronger global demand combine to tighten market fundamentals. A significant increase in natural gas prices over the past month has raised production costs for nitrogen manufacturers, with gas remaining the primary feedstock for nitrogen fertiliser production. This has reduced the likelihood of further price declines and supported a firmer market outlook.

At the same time, ongoing shipping risks in the Middle East continue to create uncertainty across global trade routes. Security concerns and potential disruptions are contributing to elevated freight rates and higher marine insurance costs, both of which are adding to the overall cost of importing fertiliser into key consuming markets.

Demand has also strengthened considerably, particularly across Europe and North America, where growers and distributors are actively securing product ahead of future application periods. This increase in purchasing activity is helping to tighten global market balances and sustain upward price momentum.

Additional support is coming from France, where government-backed fertiliser support schemes are encouraging increased buying activity. As French purchasers enter the market in greater volumes, there is the potential for supply to be diverted towards France at the expense of other destinations, including the UK. Such movements could further tighten product availability and add upward pressure to prices.

It is important to recognise that the recent market correction was primarily driven by improved supply availability and a temporary reduction in buying demand. While this provided a period of lower prices, it should not be mistaken for a return to normal market conditions. Many of the underlying risks that have driven fertiliser market volatility in recent years remain firmly in place.

• Phosphate and potash

Potash markets remain relatively stable, with little change in either pricing or market sentiment. However, phosphate values, continue to hold firm due to ongoing supply constraints and reduced sulphur availability, which continue to limit production flexibility.

With autumn drilling approaching, growers intending to establish oilseed rape should consider securing starter fertiliser requirements early. Acting ahead of peak demand may help avoid both availability concerns and potential price increases later in the season.

• What does this mean for UK growers?

The balance of risk has shifted. Although fertiliser prices remain below the extreme highs experienced in recent years, many of the factors that contributed to those peaks have not disappeared. Markets may have stabilised, but they have not fully normalised. Higher energy costs, geopolitical uncertainty, elevated freight charges, and stronger international demand continue to present upside risk to fertiliser values.

At the same time, grain prices have improved, providing growers with an opportunity to review purchasing decisions through the lens of margin protection rather than focusing solely on achieving the lowest possible fertiliser price.

Our message remains unchanged: adopt a measured, "little and often" approach to purchasing. Attempting to identify the absolute bottom of a volatile market is rarely a successful strategy. Spreading purchases over time helps manage risk, reduces exposure to sudden price spikes and maintains flexibility should market conditions change unexpectedly.

With many products now trading on a price on application (POA) basis, opportunities can emerge and disappear quickly. Growers who still have fertiliser requirements to cover should regularly review their position and remain in close contact with their Frontier fertiliser representative. In a rapidly changing market, proactive decision-making remains the most effective way to manage both supply and price risk.

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.