WHEAT

• Euro strength challenging exporters

US President Trump’s tariffs have triggered a notable swing in foreign exchange over recent days, subsequently adding a benefit for some wheat producers but the opposite for others.

The primary losers have been countries in the EU thanks to the euro rising to a three-year high versus the US dollar. This leaves EU wheat prices having to fall lower to maintain export competitiveness which is particularly unwelcome when EU wheat exports are already running at a slow pace. Shipments to 6th April were already 34% down on the previous year's pace and it seems increasingly likely that even with a smaller surplus to ship end stocks will prove burdensome. There are some concerns for 2025 wheat production potential for parts of the EU, particularly top producer France where crop ratings slipped a point last week to 75% good/excellent. The French Farm Ministry said there was delayed development of the winter drilled crop because of late drilling but that growing conditions were now improving. It sees a total French wheat area of 4.63 million hectares, 10% up on the year but still slightly below the five-year average.

• US picture

On a more positive note, US wheat shipments are running ahead of last year. This is needed given the larger exportable surplus of 22.3 million tonnes, up 2.5 million tonnes on the year from a larger crop of 53.65 million tonnes, up 4.5 million tonnes. The US weekly wheat export inspections up until 10th April were 604,000 tonnes, almost double the previous week and take cumulative shipments to 18.295 million tonnes. US wheat exporters will be helped by the collapsing value of the US dollar, but reciprocal tariffs from some key US wheat buyers could prove challenging from here on. Even if the United States Department of Agriculture (USDA) target is met, US stocks are set to rise by 4 million tonnes on the year and cushion the impact on markets for concerns for some 2025 US wheat crops. This week’s US crop condition dropped a point to 47% good/excellent and sits 8 points behind last year at this stage. Hot and dry weather for some winter wheat producing states is forecast.

• Falling world trade

The April USDA World Agricultural Supply Demands Estimates (WASDE) last week was, for the most part, uneventful. Changes for the world’s wheat balance sheet were lower, with production down just 40,000 tonnes to 796.85 million tonnes matched by a drop in consumption 45,000 tonnes down to 805.2 million tonnes. A lower carry in stock leaves world end stocks 60,000 tonnes up on the month but 8.3 million tonnes down on the year. However, for the world’s major wheat exporters year end stocks will be marginally higher at almost 60 million tonnes. This is because of lower importer demand, with China and Turkey for example notably down on the year. The USDA cut world imports by almost 4 million tonnes on the previous month to 198.844 million tonnes and over 23 million tonnes down on last season. This lack of activity has been a major reason for the falling world wheat prices this season and exporters will be looking for the lower prices to encourage a bounce back in demand.

BARLEY

• Old crop feed sees support from currency markets

The currency movements have provided support for old crop feed barley prices. With exports of old crop feed barley ongoing, the exchange rate changes have provided a sharp rise in export values and in turn also supported interior values. However, this remains against the backdrop of quiet domestic markets where the consumer remains largely absent from buying any old crop shorts shorts shorts they may have, and farmer selling remains steadily slow.

• Forecasts bring confidence to new crop malting barley

Forecasts of rainfall have given malting markets renewed confidence in new crop prospects, moving prices lower. The reality is that revisions to the forecast are frequent, and both northern EU and UK crops now likely require good rainfall. At this stage, while volumes and locations of forecasted rain remain inconsistent, the market will do well to shake itself fully free from the weather story. Malting demand remains no earlier than July or August, and overall, there remains little support to promote forward demand from the current lower levels.

OILSEEDS

Rapeseed and wider oilseeds markets continue to perplex traders, processors, and the rest of the trade, as values have continued to improve amid global tariffs, which initially looked set to stage a decline in prices.

Old crop May 2025 MATIF futures have risen dramatically versus new crop futures and are currently trading at a €70 premium to the August 2025. Towards the expiry month of the futures contract, there is often ‘technical’ trading where the futures become detached from the reality of the cash seed market. This year these movements are particularly early and reflect the extremely complicated market we find ourselves in.

Despite the discount to new crop, there are growing concerns over frost kill in some parts of Europe where frost has damaged the plants currently flowering, but the extent of this damage is still being calculated.

There are further trade challenges in the EU where tighter auditing rules for used cooking oil are coming into force after widespread fraudulent imports of a less sustainable ‘virgin palm oil’ from the Middle East were uncovered last year. These new rules may reduce demand for imported palm oil and increase reliance on domestic veg oils.

FERTILISER

• Urea/AN

This week many regions have received some rainfall – certainly welcome after a long dry period and which should serve to help ongoing establishment of winter crops.

Some of you will be aware of the supply chain issues being experienced this spring. Late demand coupled with an early, dry spring has put huge pressure on fertiliser supply. Raw materials for various blends and a lack of imports have compounded the issue further, and nitrogen supply has also been impacted due to the continued high gas values. When demand falls, producers don’t keep plants running; instead, they cut production and only increase/commence it when demand comes back. As all of the late demand came from UK and European farmers at a similar time, producers were unfortunately left unable to meet the demand quick enough.

India managed to buy some urea in its recent tender, but only just over half of what is needed. Producers are still trying to work out the consequences of ‘Trump 2.0’ policies and new US tariffs. Signals again from urea producers that they are happy with current inventories and prices. There are no signs of China or Russia supplying tonnes which means a firmer tone in the short term, so it may be that India will come back in again for more tonnes.

Summer 2025 may be a good time to reassess fertiliser buying and returning to buying more early on ready for next spring. UK farm stocks will be lower than for many a year meaning even greater demand next season. It might be worth keeping an eye on the breakeven ratio (BER) versus grain markets for a buying signal.

Protectionism and tariffs will certainly make for a tricky market next year and no one can really say what direction the market will go. You could argue that a nitrogen price in the high £300’s is a potential buy. We will continue to comment on next year as we get closer to the summer reset.

• Liquid/UAN

Large UAN vessels into both the southeast and northeast of England in recent days have replenished somewhat diminished stocks, as appetite for finished product remains high from farm.

UK portside facilities are expected to remain open over the Easter weekend to keep up with the high demand from growers across UAN and NPK grades. However, there is no escaping the pressure shorter delivery weeks place in the supply chain, and therefore growers are encouraged to call off product as soon as they have capacity in their on-farm tank storage to avoid delays. The Urea Stewardship Scheme has been in place in England this spring for over a fortnight; to remain compliant growers must include a urease inhibitor, such as Limus® Perform, throughout their liquid fertiliser programme. Elsewhere in the UK, growers are also encouraged to use a urease inhibitor in dry, warm conditions where crop cover is low. The benefits of using Limus® Perform include an improved nitrogen use efficiency (NUE) of up to 7% through reducing ammonia emissions by up to 98%. More information can be found here, or by contacting our team for more information.

• PKs/straights

One of the main issues this spring has been the late demand in the blending industry. The UK market very much depends on the supply of straights via the blending industry. Unfortunately, late demand coupled with low stocks has caused huge pressure to supply in a very narrow window. Demand for root crop nutrition earlier than the norm has also added to the problem. The market size has been declining over the last few years, but this spring has seen a bounce upwards in demand and potentially an uptick in size. It may be time for a change in strategy, with farms potentially having stocks of certain products on farm earlier than normal. Products such as potash and polysulphate would be two good examples.

Please speak to your local Frontier contact or email us at info@frontierag.co.uk  for more information or advice related to any of the topics and services mentioned in this report.

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