WHEAT

London wheat prices have continued to decline and are now around £203 May 2027. The May 2027 contract is now trading £12-£13/mt lower, since Monday 19th October on the back of the potential for peace and shipping agreements in the Black Sea region. With the Black Sea supply concerns remaining to be the market’s bullish driver, reports of potential peace agreements promoted funds to sell, reducing their long positions on MATIF wheat.

Developments in the Black Sea are the main focus for many.. Although there has been talk of peace and shipping agreements over the past couple of weeks, which has led to a sharp decline in prices. However, nothing is confirmed except the couple of coasters being allowed to leave the Straight of Kerch. 

The main news this week has been the announcement that Russia will open the Strait of Kerch. Volume is limited and potentially only to a couple of coasters that have been stuck there since July. Russia looks set to have exported 2.8mmt (million metric tonnes) during October through Baltic ports and other alternative routes. US exports remain slow as they keep missing business.  Altogether, cumulative inspections for 2026/27 are down 36% compared to last year.

There is concern new crop plantings in Ukraine could drop by 15-17% to 4-4.2mha (million hectares). Despite their poor harvest, new crop planting conditions in the US are the best they’ve been in many years due to more rainfall. Rain has delayed harvest in Brazil and Argentina, whilst Europe remains dry, adding to a challenging planting environment. The Balkans are an exception to this European dry spell, experiencing heavy rainfall during their planting season.

In the Southern Hemisphere, production prospects in Argentina have increased to 23.8mmt from 21.0mmt for the 2026/27 season due to improved yield forecasts. Although down from last year’s 36mmt, Australia is forecast to produce approximately 30mmt crop adding to Southern Hemisphere supply.    

Overall, the market remains cautious due to the recent fall in prices, with attention focused on developments in the black sea region.

BARLEY

• Feed barley’s discount shrinks in falling markets as consumers return

The entire grain complex has declined in the last week as the prospect of peace talks in the Black Sea has been renewed and offers more hope and credibility than previous attempts throughout the summer and early autumn. While futures’ markets have fallen, cash markets have inevitably followed. Although a lack of grower engagement has pushed wheat basis premiums wider and narrowed barley's discount to wheat in the feed ration. Feed consumers have identified the declines as an opportunity to start covering their forward positions from January onwards. In Yorkshire and the West Midlands feed barley has been trading nearer a £15-16 discount to feed wheat, as opposed to £17-18 previously. The dilemma of buying now or staying out hoping for further declines will weigh heavy on buyers' minds as they return to the market, but there is a growing sense of the consumer stepping in.

• Spring barley area to shrink for 2027 crop?

Malting demand continues to disappoint as first-hand demand seems to be contracting rather than increasing. In the short term the UK market is relying on replacement to support nearby demand as parcels grown for malting instead land on the feed heap. Remaining uncommitted farm stocks in England seem light, although plentiful stocks in store leave the market little need to panic anytime soon. One thing that the market can agree on is that there will be less carry-out of malting stocks from the 2026-27 season compared to recent crop years. While winter sowing conditions remain favourable, the prospect of a tighter spring barley supply for 2027 is on the cards.

OSR

• European rapeseed strengthened: MATIF OSR May futures rose 3.5% over the week to €554/mt, supported by concerns about poor soil moisture and rapeseed establishment in parts of the EU.

• Canadian supply remained competitive: A strong Canadian canola harvest increased export availability, while harvest pressure weighed on Winnipeg prices.

• Australian supply increased: Harvesting was under way, with prospects for a strong crop adding to global export competition.

• Chinese demand provided support: China's September rapeseed imports reportedly increased fivefold year-on-year, supporting the demand outlook.

• Vegetable-oil markets remained mixed: Firm crude oil prices and biofuel demand offered support, while abundant oilseed supplies and competition from sunflower oil limited upside potential.

Global OSR trade this week was characterised by increased Australian export activity, strong Canadian shipments, continued Ukrainian exports and changing European import patterns. Chinese buyers purchased approximately 1 million tonnes of Australian canola for delivery in early 2027, marking a significant development in global trade flows.

Despite support from crude oil prices and concerns about European crop establishment, increased supply availability from Canada, Australia and Russia is weighing on the broader price outlook.

FERTILISER

Urea trade has been subdued over the last week, following a rally in pricing over the previous two weeks due to rising production costs and increased farm buying. Trade has continued out of North Africa, but at very similar levels to those seen previously. The key variables for pricing will be demand and supply. As last week, there were threats of import bans on urea from certain North African countries into France, with French urea imports already 58% behind the year-on-year comparison.

With no firm signals of easing tensions across the Middle East, European gas prices have continued to climb, returning to levels last seen during the peaks of 2021/2022. Tight gas supply is causing the EU and Asia to compete for cargoes as we enter the colder periods, which is a concern given that some EU countries are at their lowest storage levels ever for this time of year. We know that gas is one of the largest costs in ammonia production, and this increase in production costs will almost certainly cause dramatic curtailment on production for any plants within Europe that are dependent on gas for their production. All signals points towards a firming nitrate market.

For those that missed it last week, there has been further clarification has on Carbon Border Adjustment Mechanism (CBAM) costs, which take effect on 1st January 2027. The initial cost impact is expected to be relatively small, with the 97.5% free allowance limiting the charge in the first year. However, as these allowances reduce over time, CBAM is likely to have an increasingly significant influence on fertiliser prices, with the carbon emissions associated with different products and manufacturing processes becoming more important. This is not to be confused with the government’s temporary suspension on the import tariffs for numerous products, of which certain fertilisers are included. This temporary suspension last until December 2027 and will impact forms of urea, ammonium, NP and NPK compound fertiliser from all destinations other than Russia and Belarus. The change to on farm levels will be low if at all noticeable, given that the pre suspension tariff levels only ranged between2%-6.5%

• Buying fertiliser inputs for crop 2027?

Where you know you have a requirement for a specific product due to crop type, spreading width or simply preference, this should be your priority for purchase. As we look at nitrogen buyers with predominantly winter-planted crops, we recommend moving to 75%+ of volume committed before Christmas. This ensures the desired product is on farm and ready to apply when needed.

Where growers have a larger percentage of spring crops planned and are not yet committed, we would encourage you to look at your physical product requirements from January through to early April. This is the period most likely to be impacted by logistics and availability pressures.

For buyers of PKs, MOP is a buy today, given its price in comparison to the long-term average and the weakness of currency. Phosphates, however, should be considered based on when the physical requirement is needed. Although sulphuric acid prices have dropped considerably, freight costs have climbed, meaning there has been no change in UK pricing.

Finally, any buyers of polysulphate should look at their requirements for the next month and secure product for pre-Christmas delivery – please do not wait until January to book.

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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