WHEAT

• Global supply pressure intensifies amid Northern Hemisphere harvests

Chicago wheat futures continued their downward trajectory this week, reflecting bearish sentiment as the Northern Hemisphere harvest gains pace. US winter wheat harvesting has commenced, with yields expected to disappoint following extensive drought damage. However, markets appear to have priced in these losses, shifting focus to ample global supply from other regions. The Chicago Board of trade (CBOT) July soft red winter wheat contract dropped to $6.08-3/4 per bushel, the lowest since early May. Similarly, European milling wheat futures slid further, with Euronext September wheat closing at €204.00/t, a seven-week low.

Overall, Northern Hemisphere crops are shaping up well, with Russia and Ukraine poised for competitive export campaigns. Russia’s agriculture ministry anticipates a robust wheat harvest, 91.5million metric tonnes (mmt), reinforcing Black Sea exporters’ position in global markets. Meanwhile, favourable crop weather across Western Europe and rain forecast in key growing regions have eased concerns over heat stress in late May. This improved outlook has pressured futures markets further, leaving little price support for UK growers.

• Australian output faces challenges, but geopolitical impacts remain limited

Australia, a key global wheat exporter, projects its smallest harvest in three years. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimates production at 26.7mmt, down 25% year-on-year due to higher fertiliser costs and dry weather linked to the ongoing Iran conflict. While this could reduce global exportable supply, the bearish tone in wheat markets suggests traders are focusing more on Northern Hemisphere surpluses than potential Australian shortfalls. The El Niño weather pattern poses additional risks, with Australia's east likely to experience below-average rainfall. However, the UK market impact remains muted as Australian wheat primarily serves Asian markets. Instead, UK growers will be more sensitive to competition from Black Sea exporters, particularly as Romanian and Ukrainian wheat prices remain highly competitive in global tenders.

With global wheat markets struggling under supply pressure, UK growers should be aware of heightened competition from exportable surpluses in regions like the Black Sea and South America. London’s November 2026 wheat futures have fallen from a high of £189.60/t on 28th May to £182.50/t at the close on 3rd June. While geopolitical developments, such as US-Iran peace talks, continue to influence crude oil and fertiliser markets their direct impact on wheat pricing appears limited for now. With the Northern Hemisphere harvest in full swing, replacement costs and export dynamics will be key drivers for UK wheat values in the coming weeks.

BARLEY

• Welcome rainfall for UK barley crops, but is it too late?

All areas of the UK have received good rainfall in the last week, while temperatures have remained above average which is a strong sign for crop growth and development. Areas such as Somerset, Wiltshire and Gloucestershire have received upwards of 25mm rainfall in the last week on average. While the drier areas into East Anglia will have received roughly half of this amount, the rain received will be welcomed on suffering crops.

The AHDB released their May crop development report Friday 29th May which highlighted the decline in crop conditions through May, with winter barley ‘good/excellent’ ratings falling 8% on the month to 62% and spring barley ‘good/excellent’ ratings at 57%. Spring barley crops in Scotland look particularly strong, rated 90% ‘good/excellent’ and Scottish winter barley rated at 98% ‘good/excellent’. With this in mind, it is reasonable to suggest that Scotland represents the strongest barley crop prospects in UK, amidst a reduction in barley area in Scotland and a shift in growing and marketing strategies from growers as maltsters and distillers cutback on demand and crop 2026 commitments.

However in the East of England, the question remains as to how much effect the delayed rainfall can have at this stage. Spring barley crops have raced through the growth stages, with crops under stress ensuring they create grains, meaning plants are short and lacking much biomass at all. In Norfolk, spring barley crops are out in ear, with other Eastern areas following suit as the prospect of an early harvest is now confirmed. The recent rainfall and warmer temperatures will raise hopes for grain in both winter and spring crops, with the market and growers hopeful that this comes to fruition to assist both quality and yield.

OSR

The UK oilseed rape market remains finely balanced as we head into June. Paris rapeseed futures (November 2026) ticked up to €459/t, testing resistance at €460/t. Weather concerns in Central and Eastern Europe, including late frosts and drought conditions, have shaved EU yield forecasts to 3.19 t/ha, according to MARS. Overall, EU production is still expected to rise modestly year-on-year to 20.85mmt, keeping a lid on price momentum.

Domestically, crop conditions have deteriorated. ‘Good/excellent’ ratings for UK winter OSR fell to 78% by late May, down from 84% a month earlier. Persistent dryness and high temperatures have increased crop stress, raising yield concerns as harvest approaches. Ex-farm prices remain firm, underpinned by strong biodiesel demand and volatile global fundamentals. However, sterling’s recent weakening against the euro (GBP/EUR at 1.1531) has offered some limited price support relative to MATIF benchmarks.

Globally, the oilseed complex faces competing pressures. Indonesian palm oil exports surged in early 2026, weighing on vegetable oil prices, while Canadian canola shipments hit crop-year highs following tariff reductions in China. Meanwhile, Australian production forecasts are down 19% which is tightening global supply chains. For UK farmers forward sales are ahead of recent years, reflecting early season pricing opportunities amid persistent market uncertainty.

PULSES

Old crop bean prices have remained firm towards the end of the season, largely due to limited liquidity in the domestic market. Despite this, a steady flow of farm beans continues to come forward, helping to cover the small amount of remaining short demand. End users have now largely completed their old crop purchasing programmes, which could see prices begin to ease as we continue to move towards the end of the marketing season.

New crop winter beans are generally looking promising, while spring beans have felt the effects of the recent dry weather more acutely. Recent rainfall will be welcomed, and growers will be hoping it has arrived in time to support yield potential.

There is some buying interest for new crop beans, with values generally trading at a premium to London wheat futures. However, sellers remain cautious and are keen to assess crop conditions and yield prospects before committing significant tonnages to the market.

FERTILISER

• Market overview

Fertiliser markets continue to be driven by geopolitical instability, resulting in heightened volatility and uncertainty. Ongoing tensions in the Middle East, particularly involving the US, Iran and Israel, alongside continued conflict in Lebanon, are contributing to an unpredictable trading environment. The outlook for the Strait of Hormuz remains uncertain. While there are intermittent reports suggesting a potential reopening, conflicting updates continue to create instability. This uncertainty is a key concern, given the Strait’s importance to global energy and fertiliser supply chains. Additionally, the Russia–Ukraine conflict remains a risk factor. Recent drone strikes, including incidents affecting infrastructure in Romania, highlight the potential threat to neighbouring allied regions. Escalating attacks across Ukrainian cities continue to add pressure to already fragile markets. As a result of these disruptions, shipping and freight costs have increased, driven by higher insurance premiums and longer vessel routing. Oil values have climbed in recent days and Dutch Title Transfer Facility (TTF) gas values remain elevated, although there has been some recent easing. However, ammonia prices continue to hold firm at high levels. India has announced a further tender for approximately 1.7 million tonnes of urea and with China expected to resume exports, this may introduce greater competition into the global market. The impact on UK pricing remains uncertain. Phosphate prices are being supported by limited sulphur availability, linked to Middle East supply constraints however, overall demand remains weak. Potash prices are relatively stable, reflecting low demand within the UK market.

• The Current Situation

European fertiliser markets have slowed following the initial wave of new season purchasing. Activity remains limited, with only modest buying reported in key regions such as France. Overall purchasing has been slower than in previous seasons. In the UK, spot demand is currently subdued. However, recent rainfall and improved growing conditions may stimulate increased demand from grassland farmers in the near term and those looking to use foliar products at ear wash on milling wheat as the application window draws closer. Purchasing decisions are being heavily influenced by farmgate economics. While grain prices have shown slight improvement, fertiliser values are still widely considered to be high. This mismatch is suppressing demand and may ultimately lead to reduced production rates if buying activity does not recover. Granular urea prices in the UK have softened slightly, but demand at farm level remains quiet. UK new-season liquid fertiliser prices have recently been released and are broadly aligned with solid nitrogen values. Market reception has been positive.

• Supply Considerations

UK-produced AN (Nitram) continues to offer a clear supply advantage. Domestic availability provides greater security compared to imported alternatives, which rely on vessel arrivals scheduled throughout the summer. Notably, some imported ammonium nitrate products originate from sources not commonly seen in the UK market in recent years, raising potential concerns around product consistency and quality. In contrast, securing UK-sourced Nitram ensures reliable and timely delivery within weeks along with known product quality and reduced exposure to global supply chain disruption. Given current market conditions, securing physical product at this stage represents a lower-risk procurement strategy.

• Summary

Fertiliser supply is tighter than in previous seasons across multiple product groups, with available tonnage remaining limited. Given ongoing global uncertainty, a phased purchasing strategy is strongly recommended. Adopting a “little and often” approach will help mitigate risk, secure product availability, and reduce exposure to potential market volatility.

• Outlook

There is a significant risk that fertiliser manufacturers may reduce or halt production if demand does not improve through the summer and into autumn. Any such reduction in capacity is unlikely to be quickly reversed and would result in further tightening of supply and upward pressure on prices. Evidence of this trend has already been seen earlier in the year, with several European production sites either scaling back output or temporarily mothballing operations. At the same time, food security is becoming an increasingly important consideration in the UK. Reduced subsidy support and tighter farmgate margins are forcing growers to scrutinise input decisions more closely. However, under-fertilising crops carries clear risks. Failure to apply nutrients at optimum levels will almost certainly result in reduced yields and lower overall productivity.

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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