Frontrunner - 23rd January 2025

WHEAT

• Wheat price rally…President Trump or weather?

The newly elected US President Trump seemed to positively impact wheat prices, despite fears that tariffs on imported goods would harm US export potential.

Chicago Board of Trade (CBOT) wheat futures gathered pace on Tuesday, gaining almost 4% by the close and posting its biggest single daily gain since 20^th May last year. The price rally was perhaps less Trump driven, though lack of immediate tariffs for China was a positive sign for US agricultural markets. Speculative fund short covering was driven by fears of exposed US winter wheat crops suffering from winter kill, with extreme cold extending across the Plains as far as Kansas.

CBOT corn futures added weight to the market positivity, rising to their highest since early December 2023, with fears for production potential in Brazil and Argentina due to adverse weather. Heavy rain has caused the most delayed Brazilian soybean harvest since records began in 2010 and if this continues it could impact drilling of the country's second corn crop. The opposite is the case in Argentina, with dryness harming yield potential.

US exporters are benefitting, with weekly corn inspections at 1.541 million tonnes above the highest trade estimates and the highest ever for the week since records began over 40 years ago. The cumulative at 19.25 million tonnes is 31% ahead of last year. US wheat inspections were at just 262,000 tonnes, although the cumulative is still 24% ahead of last year.

Adding to the market positivity there are concerns for Russian winter wheat crops which remain vulnerable should temperatures drop significantly.

• Old crop struggles to find demand

Despite weather fears for crops in the ground, Russian and Ukraine old crop wheat continues to be offered cheaply in export markets and near-term EU exporters are still struggling to gain traction with the backdrop of cheap Black Sea wheat. EU weekly wheat exports were up just 255,000 tonnes on the week to 11.743 million tonnes, 6.7 million behind last year. The UK remains the third highest taker of EU wheat, with 915,000 tonnes to 19^th January, behind Morocco's 1.214 million and Nigeria's 1.857 million.

Egypt is one of the world's largest wheat importers but currently sits behind the UK for wheat purchases from the EU. However, this may change as the country's new state wheat buyer, Mostakbal Misr, says it has signed several wheat supply agreements with European grain producers and has sufficient stocks for the first half of 2025.

• Do we have enough wheat?

Domestic price potential has limited upside, despite sterling weakness and US price gains. Cumulative total imports to the end of November are at 1.45 million tonnes due to the extreme wet autumn experienced in the UK during 2023, which extended into the winter and early new year, preventing winter wheat planting. This signalled the requirements of imports to meet domestic consumer demand. The challenge is to understand whether there is now sufficient wheat available to meet this demand before harvest.

BARLEY

• Active feed barley market

The feed barley market has been active this week, with good volumes of barley being sold by UK farmers. There has been domestic demand in the nearby positions because of the cold weather and export demand to both Ireland and Iberia, helping to underpin values. Crop '25 feed barley is trading at a much narrower discount to feed wheat than old crop (between £10 - £15 compared to £20 - £25), which will likely see feed barley inclusion rates reducing in many rations.

• Quiet malting barley market

It has been another quiet week in the malting barley market, with demand to both domestic and export destinations being muted. Malting barley premiums in some parts of the UK are now as low as single figures.

Looking forward to next year, the market is quiet. Maltsters are waiting on their brewing and distilling customers before looking to purchase due to concerns over demand persisting and growers currently not looking to market fixed price malting barley.

OILSEED RAPE

• Market focused on new US administration

The initial actions of President Trump were the key focus in the oilseed markets this week, particularly the decisions made by the new US administration with relation to biofuels, trade policies, foreign policies and many other issues.

The US dollar weakened shortly after the president's inauguration - relative to the euro and other currencies - due to indications that the implementation of import taxes on Canadian and Mexican commodities will not be announced immediately. The US tariffs on Canda are particularly important for rapeseed markets as this could force further Canadian tonnes into European markets.

The delayed harvesting of the Brazilian soyabean crop is also being watched carefully, which is partly a result of delayed plantings back in September and current wet conditions.

Vegetable oil markets have been softer on the week, limiting rapeseed prices from breaking any new ground, however, they are still trading close to yearly highs of circa £455, delivered to crush destination. High levels of crusher cover in the nearby months are helping the rapeseed market to start and develop a better carry through to the end of the year, whilst the new crop price remains at a large discount due to a rebound in European planted area.

 FERTILISER

• Urea / AN

UK and EU producers have seen a significant increase in demand, with levels continuing to step up as new production costs increase. Stock levels are so low at nitrogen production sites that offers are being revised much quicker and producers are being more reactive to the market due to there being no buffer stock to help average costings.

Alongside a much more sensitive market, we are also seeing each offer of ammonium nitrate being limited in volume and for a specific delivery period. We would therefore encourage those with requirements for February and March to consider getting product covered.

The urea market is much the same, but with the added variable of supply/demand and trading globally. This being so, we have seen further moves up within the UK and further afield on urea, following an increase in farmgate buying.

There have been reports of ammonia trading at slightly lower levels for spot immediate demand. Whilst this is a good sign for future nitrogen buyers, it is unlikely to have a positive impact on spring 2025 for UK nitrogen buyers. However, should these lower levels continue, it could be a positive signal for May/June 2025 onwards.

Frontier monitor the currency markets for all imported fertiliser and recent events in the UK and US have had a negative effect on imports, especially ammonia, urea and PKs. It will be interesting to see what President Trump will do next regarding tariffs.

• Liquid

All UK suppliers of UAN have revised spring levels, as they too look at the cost of raw materials for replacement stocks as growers look at buying their final spring tonnage. Most growers are also simultaneously getting their urease inhibitor booked - such as Limus Perform - for March delivery, ahead of the requirement within England for its inclusion with urea based fertilisers.

• PKs / Straights

As reported last week, there are firmed levels on PKs all round, due to low UK stock, sudden increase in demand and last minute stock purchasing by UK importers. It would appear that PK buying is at the forefront of UK grower's minds within crop 2025, but this comes as no surprise given yield responses to fresh sources of P and K when applied during autumn or spring. We would remind any polysulphate buyers of the requirement for it to be applied earlier in the spring season.

Please speak to your local Frontier contact or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. for more information or advice related to any of the topics and services mentioned in this report.

To be notified each time this report is published in the future, you can also subscribe at www.frontierag.co.uk/blog/subscribe to ensure you always have the latest market insights.