WHEAT

• A slow start to 2026

Wheat futures enjoyed a small improvement towards the end of 2025, but with thin technical trade, 2026 has begun on a more lacklustre note. Prices are finding some support from geopolitical risks as well as some weather issues for 2025-26 crops, but overall, the scale of the world’s wheat output this season continues to weigh on prices.

Increased Russian strikes on Ukrainian Black Sea port infrastructure, as well as on Ukraine civilian targets, does little to suggest a peace deal is near. Ukrainian wheat exports to 2nd January reached 7.91 million tonnes, 2 million tonnes down from last year, whilst corn exports were just 5.98 million tonnes, down almost 4 million tonnes from last year. The vast increases in wheat production on last year for the EU, Canada and Argentina in particular, provides more than ample global wheat supply and therefore minimal market price impact on issues in Ukraine.

London new crop wheat futures fell to a new contract low this week. With much confidence in the UK 2026 wheat production potential, it’s likely a surplus around 1 million tonnes will need to find an export market. The sterling-euro exchange rate rose to its highest value since September, adding a negative tone to UK wheat prices.

• Early warning for US winter wheat

The Chicago Board of Trade’s wheat futures found some support from the declining US winter wheat crop condition, coupled with an increase in the planted area affected by drought. Kansas, the USA’s primary wheat producer, saw a two point decline in crop condition compared to November’s rating, although this is still well ahead of last year’s 47% rating. Texas dropped from 26% good/excellent to 20%, and Oklahoma dropped from 40% to 31%, well below last year’s 45%.

• Contrasting export picture continues

US export data hasn’t helped boost US prices, although the pace is ahead of last year. Export inspections the week commencing 29th December came to183,305 tonnes, compared to 318,650 tonnes the week before and 412,542 tonnes the same time in the previous year. The United States Department of Agriculture (USDA) caught up to date with weekly US wheat export sales for the week commencing the 22nd December, which was only 95,400 tonnes. However, sales commitments are still over 3 million tonnes ahead of last year.

In contrast to the forward US trade data, official EU wheat exports continue to lag, although incomplete data paints a worse picture than actual. Brussels numbers show 11.18 million tonnes shipped compared to 11.35 million tonnes last year. However, it noted that data for France has been incomplete for the last two-year period, as well as for Poland since October 2025.

According to the data provided, Morocco is the top taker of EU wheat at over 2 million tonnes, with the next on the list being Saudi Arabia, taking less than half that at 935,000 tonnes.

BARLEY

The barley market has been relatively quiet following the festive period. A key feature of the UK market is the continued movement of barley from lower-priced port-adjacent regions into premium demand areas such as the Southwest, Northwest, and Yorkshire.

Domestic demand for old crop feed barley remains firm, with modest discounts to feed wheat continuing to support its attractiveness as a selling option. However, UK feed barley remains uncompetitive versus alternative exporting origins, which may place downward pressure on domestic values.

Looking ahead to the new crop, some limited cover has been taken by domestic compounders during the week, though overall market participation from both buyers and sellers remains subdued.

For malting barley, the new year has done little to inspire the market. Increasingly, malting barley is continuing to find its way into the feed market as premiums remain historically low. Overall, malting demand remains a challenge in both Europe and the UK. The Malting Industry anticipates further idling of UK capacity with some plant closures and mothballing announced due to slower malting demand outlook.

Looking ahead to crop ‘26, the spring barley area is anticipated to be down as a result of a significant increase in autumn sowing. Previously mentioned demand concerns in both brewing and distilling sectors look set to continue into next season, and ultimately the weather post-sowing will be the critical factor for both yield, quality, and subsequent malting premiums. For now, buyers are relatively relaxed and in no rush.

OILSEEDS

Over the past two weeks, rapeseed values have declined relatively quickly as commercial funds leave their long position and we get closer to long distance imports arriving. Physical markets have remained relatively quiet over the holiday period, with farmer selling subdued and crusher coverage mostly adequate. Trade activity has been cautious, with buyers reluctant to chase values due to a softer tone across the wider oilseed market.

Futures markets have come under some pressure, largely driven by weakness in competing vegetable oils and oilseed contracts, combined with the fund liquidation. Rapeseed movements have been similar to those in soybean and palm oil markets, where improving global supply prospects and easing demand concerns have weighed on sentiment. Technically, futures have struggled to regain recent support levels, reinforcing a slightly bearish near-term outlook.

From a fundamental perspective, attention remains on EU import supplies. European, Canadian, and Australian harvest estimates seem to show comfortable availability, Early indications suggest a generous rapeseed sowing area for next season, helped by favourable autumn planting conditions in several key producing regions. This outlook is limiting the upside potential in forward markets.

Demand remains closely linked to biofuel policy developments and crush margins, which have stabilised but offer little incentive for aggressive buying. Overall, the market appears range-bound, with external oilseed and energy markets likely to remain the dominant drivers of direction.

PULSES

• Feed beans

On the topic of exports, overseas demand remains slow. UK beans are currently about £10 per tonne higher than other origins, and remain uncompetitive, given the ample supply in the UK this gap needs to narrow to allow exports to occur likely later in the season.

With regards to the domestic market, December was a very quiet month with forward demand being absent. Buyers are happy to buy hand to mouth in anticipation of further price pressure later in the season.

Overall, the supply and demand remain heavy for feed beans. Unless demand increases significantly, prices are expected to gradually decline.

• Human consumption beans

If we first take a look at global supply, Australia’s crop has reached nearly 1 million tonnes, while the first vessels are due in Egypt within the next three-to-four weeks. Despite a rapid price decline a few months ago, Australian beans have unexpectedly maintained their value.

Closer to home, the UK human consumption bean market has effectively closed, with no further demand expected.

• Peas

At the moment, the UK remains expensive compared to Canadian peas, though a limited number of containers continue to be exported to China.

In the domestic market, there is no shortage of micronising peas, giving buyers plenty of choice. This excess supply is driving prices lower, making a seller hard pressed to find a buyer today.

Looking ahead to 2026, pea planting area is increasing. If yields are normal and quality meets specification, next season could see a very heavy supply.

FERTILISER

• Urea/AN

The global urea market is waiting for confirmation and acceptance of the latest offers in the most recent Indian tender. The volume offered is totalling 3.6 million tonnes, but there will certainly be some double counting. Some offers may lack physical product backing and its looking like they may achieve up to 850,000 tonnes in total, with product mainly from the Middle East and Russia offered. These most recent urea levels are now around $20 above the previous November tender, which is a signal for a firming market as we enter our fertiliser usage period. Interestingly, China is not really involved in this tender as it remains with no export quotas. Its involvement in global urea trade can really impact global levels.

It is likely that ammonium nitrate demand will increase as we enter the European usage period, likely adding premiums on product that is physically available to move. Given that applications of nitrogen-based product could legally begin in the UK later this month, any buyers should ensure that they are looking at their product in the shed in preparation.

• Liquid

Nitrogen and sulphur liquid remain competitive compared to solid system equivalents; likely to remain the case throughout the spring. NP and NPK liquid grades will now be getting sorted for spring delivery and use within potato, maize and vegetable crops. The interest in liquid fertiliser inputs isn’t losing momentum, with new tank installations still happening for applications this spring. Focus will then be on new installations for crop ‘27.

• PKs

Phosphates have softened further and the view is that these are now likely at the bottom of the market. It is possible that DAP will be in short supply and there will be delays in new vessel arrival, so DAP buyers should look to cover volumes over the coming weeks. Potassium is also now viewed to be at the bottom of the market, which is well timed given that UK demand comes in the spring.

Both merchant and farmer buyers have their fertiliser shopping lists post-Christmas, and there are concerns on some products and their availability throughout the season. This isn’t a new factor but is a priority for consideration since there is 30-40% of the market still to buy.

Please speak to your local Frontier contact 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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