Frontrunner - 20th February 2025

WHEAT

• Extreme cold boosts US wheat

US wheat futures rallied to multi-month highs earlier this week. Prices were driven higher by weather fears, due to a spell of cold weather forecast to hit much of the US winter wheat belt, including overnight lows of -10 °C as far south as Texas and below -20 °C in Kansas. Snow cover has been inconsistent, so given the severity of the cold some winter kill seems most likely. As a result, managed money traders took in some of their short positions, reducing their risk should yield potential have been compromised.

• Russia cuts export quota

Russia and Ukraine have been in the headlines this week, as the US looks to broker a peace deal. Wheat, other grains and oilseeds exports from the Black Sea region have seen little disruption in recent months, despite the ongoing conflict. The fast pace of Russian wheat exports has exhausted local supply to ports and led the Russian government to tighten export curbs for the remainder of the season. The quota for wheat exported from February to the end of June had been set at 10.6 million tonnes, but was cut this week to only 8.1 million tonnes.

EU wheat exports continue to struggle with only 333,000 tonnes shipped last week, taking the cumulative total to 13.334 million tonnes, almost 7.5 million tonnes behind last year. French wheat remains uncompetitive and a heavy carry out looks increasingly likely. Nigeria remains the EU's top customer - having now taken over 2 million tonnes - and the UK is third in the list of takers with 984,000 tonnes.

The UK old crop wheat picture looks stifled and prices continue to struggle. Meanwhile, the new crop November 2025 position traded to a high of £200/t for the first time since 11^th October 2024.

Saudi Arabia bought just over 900,000 tonnes of wheat this week as part of their latest wheat tender, for delivery from May through to the middle of July. Prices (including freight) ranged from $268.50 to $281.30. The majority looks to be of Black Sea origin and a mix of old and new crop. The highest prices paid to the port of Hammam are likely to be Australian wheat.

• Continue bullish corn outlook

The world corn market continues to help support wheat prices, as speculative funds add to their near record long positions in Chicago Board of Trade (CBOT) futures, amidst a wealth of bullish price drivers. The nearby CBOT corn position traded at its highest level and closed above $5 for the first time since the end of last May. January US corn exports may have pushed past six million tonnes for the first time in 35 years and February continues to run at a fast pace.

US weekly corn export inspections for the week ending 13^th February came in at 1.611 million tonnes, taking the seasons total to 24.73 million tonnes - over 35% ahead of last year. This represents almost 40% of the United States Department of Agriculture (USDA) estimate for the season, compared to little more than 30% that is usually done at this time.

South American corn production potential remains troubled, although the Brazilian second corn crop planting is catching up. Planting reached 36% complete, although this is 10% behind last year. Some rain proved beneficial in Argentina, but heat and dryness prevails in southern regions.Insert copy here... 

BARLEY

• Export activity slows, but domestic interest on feed remains

Feed barley vessels are currently being loaded with existing sales, with several more departing in March. After that, there appears to be more competitively priced feed barley available from Baltic countries, so it is unlikely that any ships will sail after March.

Domestically, there is still a relatively active market, with merchants shorts and compounders buying some volume. Supply is once again helped by malting varieties going as feed due to the non-existent old crop malting market. With maltsters in East Anglia still to take some December and January contracts, there is a definite slowdown in the malt offtake in the area.

• UK yet to start planting spring barley

So far, only minor pockets of drilling have occurred as most areas still need to dry out and soil temperatures need to rise. Forecasts show most areas getting rain over the next five days. This is by no means a late start, but a late sowing in both France and the UK would add some tensions into the crop '25 malting barley market, which may help raise bids from the malting industry.

OILSEED RAPE

• Rapeseed values appreciate slowly

In the last weeks, rapeseed values have appreciated slowly as the trade tries to get a grip of how the supply and demand situation will play out for the rest of the year.

Imports into Europe from Australia continue at sufficient pace. Canadian seed is still trading at big enough discounts to allow it to price into Europe rather than into its recent preferred home in the US biofuels industry. However, with a large import programme comes logistical and timing challenges and there is not an abundance of domestic seed to fill the gaps.

Soybean markets have taken a breather over the last weeks, as any positive sentiment over the wet conditions in Argentina and Southern Brazil subsides and traders turn again to the long term supply situation. This now looks comfortable for the season after large US and Brazilian crops came to fruition.

Relatively subdued demand for rapeseed oil in recent months, mainly via the biofuel industry, has kept a cap on prices despite what - on paper - looks like a tight supply and demand picture. Elsewhere, there continues to be supply challenges in vegetable oils for both sunflower oil and palm oil where production underperformance in the old crop positions has put a floor in market prices.

 PULSES

• Feed Beans

There is little change to the feed bean market from last week. Despite indications that a lot of domestic homes are finished buying for the season, beans continue to hold their value. We need and anticipate to see a drop in values before we see any major pick up in exports from the UK. This is required to balance our market, which is currently heavily in surplus. 

 FERTILISER

• AN/Urea

Gas prices remaining high (double those of spring '23), tariff threats from the USA and the implementation of increased duties on Russian exports, continue to add risk to a global fertiliser supply chain that is already under pressure. Production costs remain high, stocks are low and global demand is increasing. International urea and ammonium nitrate markets are all experiencing high raw material costs, or production and supply issues and these look set to continue for the next few months.

Following another increase of €20/t this week, ammonium nitrate prices in Europe have advanced by a total of €70/t (£57/t) since early January 2025. However, the UK's sole domestic producer has so far only reflected a £25/t increase on Nitram. Tight supply / demand is already becoming evident in the UK, with domestic ammonium nitrate levels inline - if not slightly under - imported ammonium nitrate and competitive with protected urea.

The offering from CF industries in the UK remains very competitive versus other nitrates and although they are fully committed until April, Frontier are pleased to confirm we have Nitram available that can be delivered within days of production, using our own logistics network. It is advised that growers cover crop requirements for February / March delivery with Nitram, whilst product is available.

• UAN/Liquid

Where conditions allow, the first applications of UAN are underway on oilseed rape and winter cereals. Growers with tank capacity can rely on prompt delivery across the full portfolio of grades available. UAN remains competitive in the current UK marketplace when compared against solid fertiliser alternatives, however with increasing raw material costs a review of terms is anticipated in the coming days. Growers with additional tank capacity are encouraged to contact their Frontier representative to discuss requirements.

• PKs/NPKs/Straights

Both the phosphate and potash markets continue to remain firm, with demand increasing at a time of supply uncertainty. With potash, any tariffs implemented by the USA on Canada, will mainly affect prices for farmers in the US, but as we are starting to see this will also be felt globally. Potash production is coming on-line in other regions, such as China's expanding operations in Laos, but this has been delayed by sinkholes near the mine. Going forward, global supply in general is plentiful, but routes to markets might alter.

Phosphate markets are more complicated. With supply already tight and with China (which controls 30% of the market) continuing to issue export quotas, markets look to remain firm.

The UK has no production of potash or phosphate and therefore is exposed to any global changes, therefore it would be wise to have your requirements covered.

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