Frontrunner - 31st October 2024

LISTEN TO FRONTRUNNER

Frontrunner is also available as a podcast, so you can hear the latest from our traders while you're on the go. Listen below or subscribe to the report on Acast, Spotify, Apple Podcasts and Google Podcasts. The report this week is read by 

WHEAT

• Markets sink to multi-week lows

The beginning of the week saw wheat futures markets extend their losses, with London wheat futures losing almost 8% of their value since the peak on 3rd October. Improving wheat crop prospects for Argentina this season, as well as for the EU and UK in 2025, encouraged the selling.

The Rosario Grains Exchange raised its Argentina wheat production estimate to 19.5 million tonnes following recent rains. It also raised the wheat export estimate to 13.3 million tonnes, which if achieved would be the second highest ever. Crop ratings for Argentinian wheat increased from 31% to 38%, 'good/excellent'.

UK and French farmers have suffered a difficult autumn so far, with excessive rains raising concerns of a repeat of the disastrous ground conditions experienced last autumn, which left the UK with a wheat deficit and France down ten million tonnes on the year. Latest data from the French Ministry of Agriculture and Food put its country's wheat planting up to 21% complete, but the impact of the adverse weather can be seen when compared to the average of 50%. A more settled weather picture is now forecast for northwest Europe and the UK through to the middle of November, which suggests winter wheat planting stands a good chance of being completed.

• Mixed outlook for US wheat

US winter wheat planting has been running at a good pace and the trade has been upbeat about production potential for 2025. Winter wheat planting reached 80% complete, just four points behind average. The trade was surprised to see a particularly poor crop condition which at 38% 'good / excellent', was nine points behind trade estimates and last year and the second worst since 1986. Chicago Board of Trade (CBOT) wheat futures rallied sharply on the news regaining losses it made the previous day.

Despite some rain, the US Midwest is still experiencing a drought area of 66%, however, much of the wheat area is expected to see beneficial rainfall over the next week, which has tempered any sustained positive price reaction.

US corn harvesting reached 81%, which is well ahead of the average of 64%. The United States Department of Agriculture (USDA) sees the US corn crop above 386 million tonnes, which although three million tonnes behind the previous estimate, is 40 million tonnes ahead of 2022-23. US weekly corn export sales grabbed the headlines, which at 3.603 million tonnes were the fifth largest weekly sale over the past 20 years.

• EU exports struggle continues

Weekly EU wheat export data put shipments until 27th October up by 241,000 tonnes to 7.261 million tonnes, which compares negatively with the 10.903 million tonnes this time last year. The data is not complete (which probably paints a more pessimistic picture) and it is important to reflect on the 2024-25 EU exportable surplus being nine to ten million tonnes down on last year. The UK is still the number four destination for EU wheat, having imported 522,000 tonnes so far - only 30,000 tonnes behind Morocco who is number three on the list.

Paris wheat futures have found some support from reports of French wheat sales to Morocco in recent days. In other trade, Jordan bought one cargo for January at $269/t including freight - $3/t up on its previous purchase - and signalled its intent to buy two more cargoes, which is a further 120,000 tonnes. Algeria is holding a wheat tender for December delivery, raising the question whether France will be excluded like in the previous tender and if Russian exporters will stick to the recommended December floor price of $250/t. Weekly Russian wheat shipments continue at approximately one million tonnes.

BARLEY

• Barley discount to wheat stays around £30

Physical barley followed futures markets down almost one-for-one this week, meaning the discount remains around £30/t to wheat. This was driven by excess domestic supply from a lack of winter barley exports, which total less than 100,000 tonnes this season, well behind the five year average. Low malting barley premiums have exacerbated the problem as some parcels have been sold as feed.

• Sporadic new crop planting progress

Winter plantings have been affected by high rainfall during September and October in several parts of England, particularly in the south, west and central regions. Only East Anglia, eastern parts of Lincolnshire and East Yorkshire have avoided much of the rain. However, some regions have seen good planting progress to date and with a drier forecast over the next seven days planting progress will be the focus for new crop next week.  

OILSEED RAPE

• Supply continues to tighten

Rapeseed values have continued to appreciate this week because of a tight supply situation in vegetable oils. This is mainly due to lower oilseed rape production in Europe and significant loses in sunflower production in Ukraine. Nearby offers of rapeseed are becoming harder to find. There could be some respite when more Australian seed becomes available in the new year, but growers there are currently reluctant to sell, hence the increased prices we are seeing.

Imposition of tariffs on Chinese goods (particularly electric vehicles) exported into Canada and the US could dramatically affect domestic canola prices in 2025. This is because China will likely retaliate and restrict canola imports and therefore we could see canola pushed further and harder into Europe.

The soybean market is watching closely and assessing the demand from China, which has currently been strong despite decreasing pig herds. A huge US and Brazilian soybean crop, combined with potentially lower-than-expected demand, could help lower other vegetable oil prices worldwide and turn oilseed prices negative.

 PULSES

• Beans

There has been little change to domestic markets this week, as feed bean buyers are well covered pre-Christmas and competition has increased from other protein sources, aided by the falling price of rapemeal. This continues to limit demand from the domestic market post-Christmas. Buyers are looking for bulk UK vessels of human consumption beans to make up for the quality issues seen in the Baltics.

• Peas

Feed peas are currently trading at a premium of £75+ to feed beans, meaning there is little demand for peas to be included in mill rations. Now is the time to be looking at feed peas before these premiums fall.

 FERTILISER

• Urea/AN

News from the Argus Fertiliser Europe Conference - which was held in Athens last week - reaffirmed messaging on pricing direction, outlook and product availability. Global urea levels have eased slightly whilst traders cover their short positions and the industry awaits the outcome of the next Indian tender which is set to close on 11th November, targeting shipment by 25th December for circa one million tonnes versus the 2-2.5million tonnes originally expected.

Geopolitical issues still threaten the market, as do increases in energy prices, with gas and ammonia having both firmed in the last seven days and the Dutch TTF gas price at its highest since December 2023. With low stocks of urea in the UK, the view is that prices will remain stable until the end of quarter four. However, there are indications that urea levels could ease off again slightly in quarter one of 2025, due to the risk of market influences disrupting levels and a shortage in time for vessels to arrive in the UK and make product available to growers during the usage period.

AN in the UK and across Europe is also heavily affected by the increasing energy prices and reduced availability of ammonia. Production capacity is being curtailed - or in some instances plants are ceasing production completely - because of high costs and current low demand from the farm gate. With high energy costs, reduced production and low demand, product availability will be restricted and volumes available throughout the spring across Europe and the UK will tighten further.

• Liquid/UAN

As the drilled winter cereal area increases across regions, growers who can commit to additional volume for spring 2025 have access to a full portfolio of nitrogen and nitrogen sulphur grades, with UAN values continuing to be well priced against solid nitrate systems. Growers who can operate a hybrid solid and liquid system, or those who are yet to buy their requirements for crop '25, should consider the benefits that a liquid system offers; with accurate and uniform spreading, dedicated external storage and a competitive value on a cost/ha basis. NPK grades are also available on a POA basis for autumn tank fill and delivery through the spring usage period.

• Straights/PKs

The outlook for phosphate over the next few months is firm due to the previously mentioned rising costs of ammonia and firmer pricing levels in the US markets, caused by a loss of production because of the recent hurricanes in Florida and limited stocks in the UK.

Potash is stable and prices appear to have reached a floor and are currently trading at levels last seen in 2021. Cereal and root growers with a requirement for the coming season are advised to contact their Frontier representative to discuss options available.

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.