Tag: wheat

Grain Market Update

Grain prices improved throughout November, with the average feed wheat price for the month just over £2 per tonne higher than the average for October. Prices remain £11 per tonne lower than November last year. Prices were higher earlier in the month before drifting lower in the second half. This year continues to be a significant challenge for arable businesses, many of whom were challenged by poor yields.

The global grain market continues to be well supplied for the current season. With the USDA back up and running following the longest shutdown in US government history, the world supply and demand estimates (WASDE) figures have been published. Novembers WASDE added a further 7 million tonnes to global grain ending stocks. The increase was mostly for wheat, with increases to production forecasts for most major exporters, without commensurate increases in exports.

One positive for the sector is the strength of oilseed rape prices. OSR prices averaged almost £410 per tonne through November. There has been a concerted effort by the oilseed industry to increase the area planted to the crop. The combination of an early harvest, kind autumn and strong prices has led to a 30% jump in area for 2026. Pest pressures for the crop have so far been low, but uncertainty around the crop leaves many reluctant to take the strong prices currently on offer.

Malting barley is an area of significant uncertainty at the moment. Demand has been poor so far this year. AHDB report that barley usage by maltsters in the first quarter of the year is down 13% compared with the same point in 2024/25. Further, usage in July to September is the lowest since 2009/10. The struggles of the malting sector have been further highlighted with two major maltsters in Scotland announcing restructuring and redundancies.

Combinable Crops Roundup

Old crop grain and oilseed markets tumbled through March.  There is a compounding set of factors behind this, including good planting progress in South America, improved weather in key growing regions, lacklustre domestic demand, and tariffs on Canadian canola (rapeseed) products. 

The most liquid old crop UK feed wheat futures contract (May-25) reached a contract low in March at £172 per tonne.  Domestically, the strong import campaign this year is going to result in an increase in stocks year-on-year.  This is despite a 20% reduction in wheat production in 2024 compared to 2023.  Milling wheat premiums have been eroded by the strong import levels.  Milling wheat premiums have fallen to just £20 per tonne, compared with £60 per tonne post-harvest. 

There is currently a £20 per tonne carry from old crop (May-25) to new crop (Nov-25) futures.  With crops reportedly coming out of winter in good condition, with limited disease levels, this premium could come under pressure.

The International Grains Council (IGC) published its first projections of supply and demand for the 2025/26 season on 20th March.  It forecasts that wheat carryover stocks will fall by six million tonnes year-on-year, despite an eight million tonne increase in wheat production.  For the wider grains complex, a forecast 52 million tonne increase in maize production leads to a one million tonne increase in total grain stocks.  The increase in stocks is further underpinned by an eleven million tonne increase in major exporter stocks.  This will put pressure on maize prices which is the main cereal crop in terms of global output.  There is still a long way to go until the 2025 crops are harvested so there is time for prices to move in either direction depending on crop progress and conditions. 

For oilseeds, soyabean stocks are expected to rise marginally, year-on-year (up one million tonnes).  However, prices have been undermined by the ongoing ‘trade war’.  Following a drawn-out anti-dumping investigation, China has placed 100% tariffs on Canadian canola (rapeseed) oil and meal.  Since the beginning of March, the value of Paris rapeseed futures (Nov-25) has fallen considerably.  From 3rd to 17th March the value of the contract fell by €40 per tonne (reaching €460 per tonne).  Prices have since recovered to €475 per tonne. 

Currency is another important watchpoint for the UK market.  Sterling has moved stronger against the Dollar.  This reduces UK grain prices relative to global markets.  However, it also makes imported inputs cheaper.  Movements against the Euro have been mixed although the Pound is currently weaker than at the start of the year (supportive of rapeseed prices in the UK).