WHEAT

Geopolitical tensions in the Black Sea remain a dominant factor for wheat markets, with fresh drone strikes on merchant vessels near Bulgaria adding to concerns over export disruptions from the region. While Russia has increased wheat shipments via Baltic Sea and Caspian routes, the Black Sea remains a critical bottleneck. Recent attacks raise risks for Ukrainian exports via the Danube and neighbouring Romanian and Bulgarian waters. However, traders noted muted market reactions to these incidents, suggesting a degree of "headline fatigue."

Meanwhile, expectations of Friday's United States Department of Agriculture (USDA) report are keeping traders cautious, with analysts forecasting a slight increase in US and global wheat ending stocks. US winter wheat plantings are lagging, with just 36% completed as of Sunday, well below the five-year average of 46% and analyst expectations of 43%. While drier weather has allowed farmers in Kansas and Oklahoma to resume planting, earlier rains have delayed progress in key areas. In addition, US wheat export sales for the week ending 1st October are estimated at 200,000 to 500,000mt (metric tonne), reflecting subdued demand amid a stronger US dollar, which continues to weigh on US wheat competitiveness.

In Europe, Euronext December wheat slipped 1.3% to €244.25 per tonne following a four-week high, as traders adjusted positions ahead of the USDA's report. London November 2026 wheat futures followed suit climbing to £210.50, its highest point in two weeks before easing back to trade in the £208-£210 range.

Russian wheat exports continue to exert downward pressure on prices, with alternative routes through the Baltic and Caspian Seas offsetting Black Sea losses. Weekly Russian exports are estimated at 265,000 tonnes, with the majority routed through Baltic ports. Analysts also revised Russian September export volumes higher, highlighting the country's ability to adapt its logistics amidst geopolitical challenges. However, SovEcon has slightly lowered its 2026 Russian wheat production forecast to 87.5mmt (million metric tonnes) from 88.2mmt, reflecting ongoing uncertainties.

Looking ahead, the market awaits, Friday’s USDA World Agricultural Supply and Demand Estimates (WASDE) report, which is expected to provide clarity on global wheat stocks and US crop conditions. With the dollar's strength continuing to impact US export competitiveness, any adjustments to supply or demand forecasts will be closely scrutinised. For now, Black Sea tensions and Russian export dynamics remain the key drivers shaping sentiment.

BARLEY

• Recent export activity while fresh consumer demand nearby in thin

In the last two-to-three weeks there have been numerous feed barley vessels loaded from the UK. Most of these sales have gone to Ireland and most have been supplied from the North of Scotland where a suppressed malting and distilling market has led to a surplus of feed barley. UK feed barley demand is healthy, so the question in the market now is around how much more the UK needs to export. The UK had a big contraction in barley sown area for the 2026 harvest and then there were disappointing yields for many, leading to a much smaller UK barley crop year-on-year. The market will be monitoring farmer activity going forward, after a period where the farmer had been a regular seller. Demand is expected to remain quiet until Christmas as buyers have good cover in place, which could put pressure on nearby prices. Looking ahead to the New Year, cover is lighter so buying activity should increase.

• New crop planting intentions begin to change amid dryness

Most of England has received, at most, half of the average rainfall it would normally receive in the last 30 days. Following a dry spring and summer, moisture is now starting to present a problem for the sowing of new crop. Crops sown in some cases are struggling to germinate and in other cases the young plants are vulnerable to disease and aphids. There are cases of oilseed rape crops that were planted in reasonable conditions failing already, with growers now facing decisions on whether to risk redrilling or turn elsewhere. If dry conditions persist then it’s likely there will be an increase in the planting of winter cereals. Although if dryness continues into November, then there will even be nervousness over winter cereals, so spring planting may become a more prominent alternative. Winter barley planting in France and Central Europe is already being affected by similar dryness on the continent.

OSR

The nearby November MATIF contract has lost more than €30/mt since the end of September. The move reflects low Rhine water levels, which are making the physical movement of rapeseed more difficult and costly, reducing interest from buyers in taking delivery against the November MATIF contract. This has added further pressure to the nearby contract as it approaches expiry, with the market increasingly looking beyond November towards the deferred positions. With the November contract due to expire on 30th October, its usefulness as a guide to the underlying physical market is becoming increasingly limited.

Overall, the OSR market remains fundamentally supported, with energy markets and geopolitical factors continuing to be key drivers of supply risk. For prices to regain upward momentum, the market is likely to need fresh support from vegetable oils, energy markets or renewed supply concerns. In the absence of such a catalyst, the combination of good UK yields, improved availability and current logistical constraints points towards a more cautious and volatile market in the weeks ahead.

FERTILISER

Having remained on firm footing since mid-August, the global urea market has lost momentum over the last week. Additional Chinese export quotas, subdued South American demand and a lack of urea shipments through the Strait of Hormuz have created uncertainty across the market. While producers have seen limited interest at previously concluded price levels, few are actively pursuing sales.

The announcement of a fourth round of Chinese export quotas, covering approx. 1.7 million tonnes, is expected to have a direct impact on values in this week's Indian purchasing tender, which is due to be announced imminently. Many market participants anticipate that few, if any, cargoes from alternative origins will be secured. The larger question remains how relevant the tender will be to the broader granular urea market, particularly given the ongoing supply disruptions in the Middle East.

Following a strong period of buying activity since August, European demand has eased, although elevated regional gas prices continue to present challenges for local producers. While opinions differ on the significance of next week's Indian tender for the wider market, many participants are choosing to remain on the sidelines until the results are announced on 7th October.

News of factory shutdowns and production cuts due to the European gas prices were announced recently further tightening an already constricted supply in fertiliser available to Europe and the UK. Several Ammonia production factories have cut production along with factories producing solid fertiliser on maintenance shutdowns.

In the UK, values have firmed modestly but continue to trade below replacement cost levels, largely due to forthcoming vessel arrivals and healthy Urea inventories currently held at ports, where storage capacity remains constrained. Market participants are balancing the need to accommodate incoming cargoes while building stocks ahead of 1st January 2027 and the introduction of Carbon Border Adjustment Mechanism (CBAM), ensuring product availability for the key spring application period. This pre-CBAM stock build remains a significant factor supporting recent gains in UK Urea values.

Urea is also expected to be among the products most affected by the forthcoming CBAM regulations. While it continues to offer competitive value on a p/kg N basis, this is likely to be most attractive to established Urea users and growers still evaluating their nitrogen purchasing strategy.

UK-produced CF Nitram remains available for October and November delivery at levels broadly unchanged from the previous week.

No further clarity on the UK CBAM ‘Fertiliser Tax’ is expected until later in October. Liquid is currently the only products available with a Spring delivery as all solid fertiliser suppliers are nervous in offering for a January position onwards due to the unknown CBAM costs and are currently only offering delivery up until Christmas.

Nitrogen and nitrogen sulphur prices have continued to increase in Europe on the back of the high gas prices despite a slow-down in farmgate purchasing. Dutch TTF gas prices fell last week from the highs in mid-September but have rebounded again to a 2-week high and are currently trading around €76 but each day we are seeing volatility, with values up and down day to day. With the Strait of Hormuz heavily disrupted the European fertiliser buyer is exposed to competition from other areas of the globe. Several European fertiliser production factories have curtailed production which has impacted product availability to the market giving concerns over supply heading into the spring for these products. European gas storage levels are low and inventories around 70% whereas normally they would be around 90% full and with the winter season approaching this will increase demand further. Oil also remains a factor but that has fallen slightly over the same period as gas but has rebounded slightly and to add to this currency which is making imported products more expensive. Should the Strait of Hormuz re-open today, it could be well past the spring delivery period before fertiliser supply issues ease.

Whilst the gas price remains high it is currently more cost-effective for ammonium nitrate producers to import Ammonia than to produce it putting CF Nitram in a good position to supply the UK on a best -priced ammonium nitrate product in the market at present although we are now looking at November at the earliest for current offers and with December being a short month we will soon be looking at January delivery options and that will have CBAM implications keeping the prices firm.

As mentioned earlier, liquid is currently the only spring delivery fertiliser the market can offer and reflects good value on a p/kg basis for the later delivery, and the current offers give the security that growers can cover their full requirements. Tank-fill options are also still available, and we also have capacity for any new customers wanting to covert to liquid for this autumn and the spring.

Grain prices have increased over the last month but took a dip recently. However, with Black Sea issues causing concern prices have increased again and are still favourable from the values early in the harvest period.

Fertiliser purchasing from farmgate had slowed over the last couple of weeks which is likely to be due growers busy drilling and also the lack of rain we have seen recently however as some areas have been fortunate to see some rain then the number of enquiries has picked up in the last week.

Our message remains to purchase at least 75% of fertiliser requirements pre-Christmas to ensure product is on farm in time for spring usage. It may seem early to be considering this now however factory curtailments show an availability problem may be ensuing along with a lack of available port space and logistical challenges as we head into spring.

Please speak to your Frontier representative for market information and to secure your fertiliser to manage risk in the current market.

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.