WHEAT

Wheat prices drifted lower over the past week as ample Black Sea supply, subdued export interest and hopes of easing Black Sea tensions outweighed support from Chinese buying interest in US wheat. Wheat futures in Europe and the US seem to have found a support line over the past week as the recent sell off slows and the market looks ahead to trilateral talks between the US, Ukraine and Russian in Abu Dhabi next week.

It’s hard to see how a peace deal will be reached but no one wants to take the price risk either way. Funds are thought to have reduced their long on MATIF wheat to 40,000 contracts. On the other hand, funds are 73,000 contracts short of Chicago Board of Trade (CBOT) wheat.

Russia has dominated wheat supply over the past week. Weekly shipments rose 121% from 286,619mt last week to 523,472mt (metric tonne) in the week ending October 30th, with Baltic ports handling 85% of the total. October exports were forecast at 3mt, the highest monthly volume of the 2026/27 season. November could exceed that though rail congestion, competition for terminal capacity and the mid-November closure of river navigation may limit further Baltic growth. To support exports, Ukraine and Turkey have announced a joint effort to protect traffic leaving the Pivdennyi, Odessa and Chornomorsk ports and Russia will protect traffic leaving Novorossiysk, Taman, Tuapse ports. There remains uncertainty on the potential Ukraine and Russia carry through to the 2027 crop year, which could weigh on European prices despite the rise in input costs and cost of production.

Wheat harvest is underway in Argentina and Australia with no issues to report so far. Southern Hemisphere supplies will continue to weigh on the market, especially given traders will be looking for alternative supplies to replace reduced Black Sea exports. France has recently been competitive in the Northern Hemisphere export market, but as its export supplies begin to tighten, Argentina, Australia and Canada are expected to take its place. Consumers seem short for January – June with plenty of wheat still to buy. The outcome of the talks in Abu Dhabi could drive a further round of buying interest or keep it shelved for a while yet.     

Key items to watch over the coming weeks are any confirmed Chinese purchases of US wheat, the outcome of the peace talks between Ukraine and Russia, the pace of Russian shipments, and the November World Agricultural Supply and Demand Estimates (WASDE).

BARLEY

• Feed markets suffer from illiquidity

UK barley fundamentals remain supportive to prices despite continued diplomatic engagement between Russia and Ukraine eroding the risk premium in global grain markets. A smaller UK barley crop and reduced farmer selling are keeping supplies tight, which is helping barley prices strengthen against wheat in feed rations. Outside of a few compounders, fresh consumer demand has been light despite there being plenty of business to be done January onwards. Buyers are either staying out hoping for further market price erosion or are in the market but are targeting values at wider discounts to wheat or at smaller basis premiums than sellers are willing to trade at today.

• Global buying interest returns as Australian crop grows again

Globally, markets have started to find demand. At market highs Jordan passed on barley tenders several times, but in this dip in the market they have bought barley once again. Jordan have purchased 110,000mt of barley for shipment January/February 2027 in the last two weeks. They did pass on their most recent tender on 4th November, likely awaiting certainty and stability around both grain supply and freight costs, hoping both may fall again. Tunisia have also been in the market in the last week, buying 100,000mt feed barley for December shipments.

Meanwhile, in the Southern Hemisphere crop prospects still look strong with the main headline today being the ever-increasing Australian crop. Local estimates are now pushing the already-record-breaking Australian barley crop over 18 million tonnes. Production estimates seem to be continually rising, and the market will see this barley available earlier than usual with harvest three-to-four weeks ahead of schedule.

OSR

OSR has had a tough week with MATIF’s February 2027 contract tumbling €27/mt to €526.00 following the strong reduction in Brent crude oil prices. Brent crude has fallen $20/barrel over the past week as hopes for peace in the Middle East rise. Speculative fund selling, strong global supplies and a general weakness across energy markets is weighing on OSR prices.

Funds have reduced their long in MATIF OSR from +60,000 contracts in early October to +40,000 contracts today. At the same time, funds have reduced their longs in CBOT soybeans from +249,000 contracts long in early October to +164,000 contracts long today.

European Union Deforestation Regulation (EUDR) coming into force are a major point of concern for European oilseeds (OSR/soybeans/soymeal) in general. It is thought that if the current regulations are enforced then this could lead to a 10-20% rise in the cost of oilseeds which isn’t feasible and will likely lead to a reduction in livestock numbers and therefore oilseed demand.

FERTILISER

Recent UK fertiliser industry statistics show that actual farm deliveries are running around 10% behind last year, while import data indicates there has been no significant increase in landed tonnes versus the previous season.

The word resilience is frequently used when discussing the fertiliser supply chain, but the reality is that there are very few options available when trying to service a compressed spring application window.  There is potential to import products however, this will cause storage issues. Hazardous material regulations severely restrict storage capacity at UK ports, leaving little room for additional inventory.

Historically, the most efficient and reliable place to store fertiliser has been on farm, ready for spring application. For over 50 years this model served the industry well. More recently, , changing farm purchasing habits have driven a greater reliance on "just-in-time" buying. If current trends continue, spring 2027 could present the biggest supply chain challenge our industry has ever faced.

Imports are broadly similar to last year, deliveries remain behind and we now have only around 33 effective delivery days before the Christmas break. While haulage capacity is generally available during this period, many farms are understandably focused elsewhere and are not actively taking deliveries.

The key question remains: what happens if we get an early spring?

The situation is mirrored across much of Europe, but many continental markets have the advantage of greater domestic manufacturing capacity and local co-operative storage networks holding product closer to farm. UK regulations have largely removed those inland storage options, increasing reliance on product moving directly through the supply chain when demand arrives.

There is already plenty to think about regarding product availability, but logistics could become an equally important factor this spring. With diesel prices at levels not seen for some time, haulage companies are facing significant cost pressures just to keep vehicles on the road. At the same time, competition from other industries offering higher returns, simpler delivery schedules and fewer hazardous load requirements means the fertiliser sector is unlikely to have access to the same level of haulage support that it has traditionally relied upon.

This is another reason why late purchasing carries increased risk. If fertiliser demand becomes concentrated into a short period, particularly following an early spring, the challenge may not simply be product availability but having sufficient transport capacity to move tonnes when and where they are needed. As an industry, we face limited manufacturing capacity, restricted import volumes and a logistics network that cannot be expanded overnight.

Forward planning remains the best defence against these risks. The more product that is positioned on farm before Christmas, the greater the likelihood of avoiding the supply bottlenecks that could emerge during a compressed spring application season.

For several weeks now, our advice has remained unchanged: aim to be 75-80% covered for spring requirements, with as much product physically on farm as possible before Christmas.

We'll continue to reinforce this message over the coming weeks. It may not guarantee a smooth spring, but it gives both farmers and the supply chain the best possible chance of ensuring timely product availability when demand arrives.

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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