Frontrunner - 13th March 2025

WHEAT

• USDA presents bearish numbers
  
  

Earlier this week the United States Department of Agriculture (USDA) published its March World Agriculture Supply and Demand Estimates (WASDE), presenting a heavier wheat year end stock and an overall bearish outlook.

The USDA managed to find an additional 2 million tonnes carry in on last month; an adjustment that dates back before the 2022-23 season. Production increased for Argentina, up 800,000 tonnes which has been overdue. Australia, as expected and in line with the ABARES report, was up 2.11 million tonnes, with Russia also up 100,000 tonnes. It also found another 500,000 tonnes in Ukraine; most of which ends up in the end stocks. Overall, world wheat production is up 3.5 million tonnes on the month to 797.23 million tonnes.

Consumption rose 3 million tonnes to 806.65 million tonnes, but world end stocks are now seen at 260.08 million tonnes which is up 2.5 million on last month, although 9.5 million down on last year.

A further look into the USDA March wheat balance sheet found little to be excited about. Away from the headline numbers, cuts to wheat imports highlight the ongoing demand issue. China imports are down 1.5 million tonnes to 6.5 million with less than half imported last season, with other import cuts for Turkey down 1 million tonnes to 4 million tonnes; its lowest for 12 years. Iran is down to 1.3 million tonnes, its lowest for seven years.

The USDA left Russian wheat exports at 45 million tonnes. With the recent sharp slowdown in shipments and the import tariff in play, this is not achievable. It's possible that 4 million tonnes is unlikely to be exported and will find its way into the end stocks, presenting a more bearish world balance sheet.

There is still the potential for a bullish helping hand from world corn, with minor production adjustments for Russia up 750,000 tonnes, Ukraine up 300,000 tonnes offset by Mexico down 400,000 tonnes, and South Africa down 1 million tonnes. Argentina and Brazil were left unchanged.

World production is up 1.7 million tonnes to 1.214 billion tonnes but still trails consumption by over 25 million tonnes leaving year end stocks down almost 1.35 million tonnes on last month and 24 million tonnes on the year at 314 million tonnes. South American weather and production prospects remain key watch points.

• UK wheat prospects
  
  

UK wheat prices have edged higher this week, with London wheat futures gaining £3 from last week's contract lows, helped by modest strength in other futures markets and a spell of weakness for sterling which slipped to its lowest versus the euro since January. This left further imports more expensive and the potential for UK wheat exports more feasible.

With a settled spell of weather across the country allowing widespread fieldwork, more interest is being shown in prospects for the 2025-26 season.

Beneficial weather and good ground conditions allowed farmers in the east of the UK at least to complete their winter wheat in a timely fashion and we are seeing a range of 2025 wheat production estimates. Trade body Coceral see a similar wheat area to that of the AHDB in its Early Bird Survey, with a modest yield of 7.95t/ha and crop at 12.8 million tonnes. Analysts Stratégie Grains is more upbeat, with a larger area and higher yield crop of 13.316 million tonnes. Whatever the case, it's estimated that UK farmers will harvest approx. 2 million tonnes more wheat than they were able to last year, although production will still be below expected demand of around 14 million tonnes. This suggests another season without exports, a need for imports and 2025 wheat prices are at a measurable premium to old crop. November 2025 London wheat futures are currently trading at around £15 per tonne above the old crop May 2025 position.

• Reasons for concern?
  
  

Despite the heavy world old crop position, there are some potential 2025-26 production issues which need to be watched. This week the US Southern Plains are likely to see an expansion of the area in drought with record high temperatures forecast this week and 75mph winds.

Kansas, the primary US winter wheat producing state, is now publishing weekly winter wheat crop condition reports and saw a two-point decline on the week to 9^th March down to 52% good/excellent.

Low soil moisture in eastern Ukraine and Southern Russia with little rain and above normal temperatures could develop into a more tangible issue for 2025 wheat production and needs a close watch.

Weekly French wheat crop condition recovered one point on the week up to 74% good/excellent and is now six points ahead of last year. However, two years ago the area extended to 95% so at this stage, without beneficial weather, a more troubled crop like last year could result.

Meanwhile, The Indian Agriculture Ministry presented an upbeat outlook, stating the 2025 wheat output will be 115.4 million tonnes up from 113.3 million the previous season. This will be a new record and if realised dismisses any need from imports that have recently been proposed by domestic millers.

BARLEY

• Feed prices continue their slide
  
  

Lack of further export interest for old crop cargoes, world futures markets for grains dropping due to tariff implications and lower demand levels compared with previous seasons have taken support away from prices, seeing them slump a further £2-3/tonne. Good rainfall in Spain on its growing crop also means the Spanish farmer has less need to hold back old crop as a hedge against a summer drought. As a result, for the next month or there looks like little upside. Once we enter the late spring / early summer in central and northern Europe, things can change if a lack of rainfall becomes apparent. As always, eyes are also on the Ukraine and Russian crops and how they fair.

• Malting industry assesses slowdown in demand
  
  

Bids for old crop parcels on farm have now completely vanished as slower offtake by brewers is building up stock at the malting plants. Hopefully this picture will change as Easter approaches. As one major brewer stated a few years ago a warm, sunny Easter is a bigger volume period than Christmas for beer sales.

For crop 2025, supplies prices have also fallen on low volumes of trade as the spring barley sowing campaign across Europe and the UK increases. France will be largely complete by this weekend with England heading towards 65 – 70 % done. Again, growers will be looking for rain within four to six weeks of sowing before they feel happy with crop establishment. Malting premiums over feed are £20-35/t depending on location for crop 2025.

OILSEED RAPE

The market remains under bearish pressure, primarily driven by the ongoing trade tensions and tariffs between China and North America. The US has imposed tariffs on Canadian imports, forcing Canadian Canola prices lower to remain competitive in the US biofuel industry. Simultaneously, China has also implemented tariffs on Canadian Canola, further limiting available export destinations. Additionally, China's tariffs on US soybeans have made US-origin beans relatively cheaper, leading China to shift purchases towards South American suppliers. These factors have collectively influenced rapeseed pricing, making it less competitive against other oilseeds and forcing the prices lower.

The global oilseeds supply and demand outlook remains comfortable for the year, supported by large soybean crops from the Americas. Australia's Canola harvest is underway, with expected production around 6.5 million tonnes, a 14% increase year-on-year, though recent estimates suggest it may trend closer to 6 million tonnes. In Brazil, soybean planting for the 2024-25 season has reached 67% of the total expected area, progressing smoothly with no major issues reported.

Crude oil prices continue to decline from recent highs, with forecasts suggesting a drop to five-year lows in 2025. The surplus is expected to be significant enough to limit any price effects, even amid heightened geopolitical tensions in the Middle East.

Soya meal exports have surged by 24% year-on-year, marking the highest monthly volume since August 2023. This increase is driven by large importers anticipating the European Union Deforestation Regulation (EUDR), which was initially set for early 2025 implementation but has now been deferred. If more soybeans are crushed, Europe could see increased oilseed meal supplies due to the lower oil yield of soybeans.

On the bullish side, palm oil is currently commanding rare and significant price premiums due to reduced production and increased domestic consumption in Asia. This has prompted importers to seek alternatives, and in Europe, where nearby vegetable oil supplies are tight, prices have remained buoyant. Australian farmers have been slow to sell, which has contributed to firmer seed prices, a trend further reinforced by European sellers holding onto stocks at these supported levels.

Speculative funds are holding a record-long position in rapeseed, currently estimated at 2.5 million tonnes. This has played a role in recent price increases and could contribute to market volatility depending on future fund actions.

Looking ahead, the trade policies of the Trump administration are expected to significantly impact agricultural markets, particularly soybean values and global trade flows. The likelihood of further tariffs on China remains high, while internal biofuel policy shifts may introduce additional market uncertainties, especially as the US transitions away from a pro-biofuel stance.

 FERTILISER

Urea/Nitrates

Urea values have remained flat over the past week mainly due to a lack of news on Indian tender requirements for April and May. Exchange rates between sterling and the US dollar have also helped alleviate values, compounded further by production rates improving in the Middle East and China especially. Industry commentators are now anticipating that India will come to the market over the next week and, if the case, this will offer some support short term to values.

In the UK, the chances of new urea cargoes coming in are slender, mainly on stewardship requirements for England coming into effect. This will only serve to tighten nitrogen product availability over the next month or so.

Gas values have weakened of late but still remain historically high and will continue to impact production costs on AN both here and Europe. Frontier can offer a full portfolio of nitrogen options for spring delivery.

Liquid/UAN

Applications have commenced across the UK given the fine weather this past week. With that, it is important to call up spring loads to ensure a timely delivery so growers should keep this in mind when planning applications.

Market wise, values remain stable and availability for new orders remains fluid with no restrictions across our suppliers. For growers with tank capacity and a good spraying window, its worthwhile considering liquid PKs and NPKs especially on high value crops such as potatoes and vegetables.

The urea stewardship window is approaching from 1^st April and with this it's timely to consider the benefits of using inhibitor products such as Limus Perform, which will improve nutrient availability to the crop whilst reducing ammonia losses, thereby enhancing yield and broadening application timings.

PKs/Straights

PKs and straights remain tight on supply around the UK, with MOP particularly affected. The late season hasn't been easy to navigate regards delivery opportunities with the arrival of late cargoes and indeed problems with delivery timings remaining short-term. Market wise, demand and tariff threats are firming both potash and phosphates going forward into spring and future cargoes will be higher in price. It is advisable for those who have not ordered yet to check their requirements and order the full needs at the soonest opportunity for April delivery.

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