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Markets slipped lower this week but further problems for Southern Hemisphere wheat production helped generate a mild recovery on Thursday. In southeastern Australia, persistent rain and consequential flooding across thousands of acres of arable land is damaging yield and quality. At this stage it is uncertain what impact this will have on total Australian wheat production. Recent estimates are at 34 million tonnes which would be the country's second ever highest crop after last year's record of 36.3 million tonnes.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by farm trader, Sophie Powell.

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WHEAT

WHEAT

• Argentina wheat potential worsens

Markets slipped lower this week but further problems for Southern Hemisphere wheat production helped generate a mild recovery on Thursday. In southeastern Australia, persistent rain and consequential flooding across thousands of acres of arable land is damaging yield and quality. At this stage it is uncertain what impact this will have on total Australian wheat production. Recent estimates are at 34 million tonnes which would be the country's second ever highest crop after last year's record of 36.3 million tonnes.

Across the other side of the Atlantic in Argentina, there are contrasting weather patterns. Prolonged drought conditions have caused a continuation of revisions for this season's wheat production estimates and this week they were cut further. The Rosario Grains Exchange cut its Argentina wheat production estimate to just 13.7 million tonnes, which is almost nine million tonnes below last year's record of 22.5 million tonnes. This would be the smallest crop since 2015/16. Last season, Argentina exported over 16 million tonnes to fill part of the gap left by the interruption in Ukraine's wheat export programme, but there will be less than half of that available to ship this season.

• Russian exports push markets lower

Analysts see Russian wheat shipments rising to 4.5 million tonnes this month as the pace to shift the potential 47 million tonnes surplus from its record 100-million-tonne crop hots up. Algeria, Saudi Arabia and Turkey have bought significant volume this week and it is likely all will be sourced from Russia. Pakistan will also be added to the list of the wheat buying nations while the country works to conclude deals to secure 500,000 tonnes for shipment by the 10^th of January.Meanwhile, uncertainty over the longevity of the Ukraine Black Sea export deal continues to influence markets. Ukraine now has 165 vessels delayed due to the checking process and has accused Russia of blocking full implementation of the deal, with ports only running at 25-30% capacity.

BARLEY

• Higher sterling spoils prices as export interest appears for feed barley

Since last week, there have been more enquires for cargoes of feed barley to Spain and Portugal and two or three cargoes have traded. However, recent rises in the value of sterling have meant the difference in crop valuation between buyers and sellers has widened by around €5/t, which has prevented further trade this week. Exports are not running at a pace currently to move the potential surplus of nearly 1.5 million tonnes - even with a good malting barley sales programme. If the current situation continues, it will result in a stock build at the end of the year or a drop in values to become more export competitive. Therefore, a drop in the value of sterling is beneficial to UK prices and the volume of sales the country can make. Talks of disruption to the Ukraine grain corridor keep interest there from EU importers and the lower currency makes it happen.

• English maltsters still have a little demand to cover

As feed prices have dropped, the malting premium has widened out again by around £10/t. The highest premiums are for the February to May months, where they are now £40 - £50/t over feed values. With all the uncertainty around the demand for beer and the cost of production and service, growers should feed the market with more supply at these higher premiums. In Europe, brewers are having initial conversations about the potential for reduced demand for beer. Brewers are generally optimistic, so this is an interesting message that is coming across. The rebound of demand due to Covid-19 has been good and perhaps better than expected, but access to disposable income is what keeps consumer demand up and this could be impacted by the increased cost of living.

​OILSEED RAPE

• Oilseeds weather update

In the last month, long spells of continuous heavy rainfall have been hitting the eastern coast of Australia which is causing major flooding in many affected regions. Whilst canola crops in the East and South will have inevitably seen some damage, the bulk of the canola production stems from the West. Conditions over the next few weeks in this region will be closely monitored as the country enters its harvest period and as a result, losses can then be quantified.

In soybean territories, Argentina received some necessary rain this week. However, widespread dryness looks set to return next week and extend through to the end of November. As the La Niña weather pattern persists through until the end of 2022, Argentina is due to start planting soybeans in mid-November. South Brazilian rainfall remains close to normal but central regions are forecast to be dry into at least into mid-November - this needs to be watched as it will surely affect soybean production levels there.

• Black Sea traffic

This week, a factor directly affecting UK and European rapeseed markets has been the increasing levels of traffic around the Bosporus Straight and shipments entering and exiting the Black Sea. Vessels are suffering considerable delays due to increasing wait times when going through checks in Turkey, which is therefore causing buyers to scramble and pay higher values to fill their near-term requirements. The current export corridor deal expires in nearly a month and the Russian contingency is currently voicing complaints over "unfairness". The trade will watch these developments closely and be hesitant to buy any more Ukrainian origin grains and oilseeds via the Black Sea. In a year where rapeseed production looks to heavily outweigh demand, this is a factor giving the market some strength. 

 PULSES

• Pulses crop area data released by Defra

As bean markets continue to fall, the pressure on values was intensified this week after Defra released its crop area data for pulses. The bean area for 2022 increased to 208,000 hectares from 185,000 hectares in 2021 - a rise of 13%. It's extremely difficult to assess average yields in the UK but even if a low level of 3.6t/ha is assumed, there's a crop in excess of 750,000 tonnes. This figure includes an old crop carry out and is far more than what was expected in previous trade estimates.

The pea area harvested fell slightly this year to 56,000 tonnes from 60,000 tonnes in 2021 - a fall of 6.3%. However, as the area is relatively small there's very little impact on market values expected. 

 FERTILISER

• Urea/AN

Historically, the last two weeks of October would have been an autumn reset in the UK fertiliser industry. We have seen some reductions in phosphate and potash, but from the nitrogen side a reset is more difficult as many European nitrate producers remain shut due to gas supply issues. Volatility remains in the gas markets. There are reports of France and Germany at 100% storage capacity and some liquified natural gas (LNG) cargoes continue to look for homes in the spot market. The challenge is that the storage capacity doesn't get France and Germany through winter, so there will still be volatility depending on winter temperatures.

Granular urea offers are still the best buy in the market but with limited space due to the current stocks being bagged. New cargoes are hard to find homes for in the spot market too. Ammonium nitrate offers remain very limited to a couple of shippers with no real interest to commit volumes given the supply issues.

• Liquid

UAN tonnes available to the UK marketplace remain limited. However, values are also unchanged for both autumn and spring delivery. As cereal drilling is nearing completion or is completed, growers should look to reassess requirements for the coming season.

All growers are encouraged to include Limus® Clear throughout their liquid fertiliser programme in the spring. The benefits of Limus® Clear include an improved nitrogen use efficiency (NUE) of up to 7% through the reduction of ammonia emissions by up to 98%. More about the product can be found here.

• PKs/NPKs

The timing of last week's drop in P & K values has coincided with half term and low activity on farms. Demand for nutrients that can be applied in the spring has remained low, even with the price reduction. It's advised to watch the markets and keep in contact with your Frontier advisor as there's potential that prices will firm again shortly. 

Get in touch

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.