We have had a long, dry spell with not a lot of frost – and for February, at Lochton near Coldstream, only 18.4mm of rain fell which I am told is 46% of their average rainfall for February.
For the first two months of this year, 67mm of rain fell compared to 99mm for the same period in 2024. Even with the low rainfall, apart from some fertiliser applications there has not been any sign of any drills venturing out yet. The forecast is more of the same and warmer weather later this week so we may yet see some action soon.
Wheat
AHDB’s Agri-market outlook for cereals released recently shows UK wheat production in 2025 is set to rise from the levels of 2024. Production is forecast to rise from last year’s total of 11.1mt based on a low yield of 7t/ha.
If the average yield over the last five years of 7.8t/ha is achieved, then production would be around 12.5mt. If we look at the AHDB‘s Early Bird Survey, then there is a possible 5% increase in planted area which unless yields are above average production, we will still not return to the 2019/23 average production achieved of 13.9mt.
The next few weeks will be key for indicating what we can expect yield wise and if the current weather pattern continues, we will see seed drills out in force and sowing into good seed beds later this month.
Sterling strength and euro weakness have been an issue, causing wheat prices to fall, and this has seen May 2025 old crop futures fall and November 2025 futures rise. Currently, May old crop futures stand at £175.75/t and November new crop futures stand at £190/t, meaning there is a carry of £14.45/t which is the greatest premium since July 2023 when the November 2025 futures began trading.
Old crop UK feed wheat prices need to fall to a point where some element of export activity can be established. Support for the new crop comes from the uncertainty of the potential size of the UK 2025 wheat crop which could vary from a low of 11.1mt to a high of 14.4mt.
UK feed and milling wheat prices continue to decline amid ample supply and limited fresh demand.
US wheat futures have dropped as temperatures in the winter wheat belt rise from last week’s severe freeze, reducing the risk of winter kill.
The Chicago Board of Trade futures gained over 10% in value during the first half of February, rising to its highest price since last October. This was due to concern that the US winter wheat yield potential had been compromised by the recent extreme cold spell.
However, this past week, almost half of those futures gains have been lost as temperatures rose to 20C from -20C. Another factor which was depressing the wheat market was President Trump threatening to impose a $1m fee on any Chinese vessel arriving at US ports. In Russia, their 2025/26 wheat production figure was lowered by 2mt due to lack of rain and severe frosts, and abnormally cold weather is likely to continue.
UK cereal exports and imports
For the first three months of this season, from July to September UK wheat imports totalled 1.70mt, 60% higher than at the same point last year, and 74% higher than the five-year average.
Most of the wheat imported has been supplied by Germany, Canada and Denmark and is mostly milling quality. Full season UK wheat imports are estimated to reach 2.75mt and halfway through the season, 62% of this total had already been imported. Maize imports started off strongly as they were price-competitive over UK barley and wheat. From July to September, imports totalled 1.42mt, up 14% on the same period last season and up 16% on the five-year average.
Recently, the AHDB estimated that full season imports of maize would reach 2.68mt but as maize, globally, has become less price-competitive, then imports will likely slow in the coming months.
UK exports from July to December totalled just 257,000t, 37% lower than last year and 65% lower than the five-year average.
However, exports reached their highest point in December at 68,000t, compared to a low of 22,000t in September, and the forecast is for 500,000t to be exported in the 2024/25 full season. Full season exports are forecast at 500,000t, down by 36% from last season, and exports from July to December totalled 257,200t, a drop of 37% from last year.
Barley
Low malting barley premiums and low demand have seen more malting barley sold into the feed market which has caused price pressure on feed barley and falling wheat markets. The premium of malting barley over feed in December averaged £19.20/t, which was down from December when the figure was £24.60/t and November last year when it reached £66.70/t. Ample supply of UK malting barley and relatively weak demand are both key factors affecting premiums.
The barley price discount to wheat varies depending on location but has been around £16-£18/t compared to £20-£27 in 2024, but it would appear that feed barley has to maintain its discount of at least £20-£24 below wheat to remain attractive to consumers and maintain domestic demand.
Barley usage by the brewing, malting and distilling sector totalled 982,700t from July to December 2024, which was 7.6% down on the same period last year. Total cereals usage by this sector is forecast to decline this season due to a downturn in demand and is partly driven by the increase in the cost of living, as well as the longer-term trend of fewer younger people choosing to consume alcohol.
Retail volume sales of beer and lager have remained constant over the past two years as higher prices have constrained sales. There has also been a 4.6% volume growth for non-alcoholic beer during 2024 on the back of price rises over the past two years.
Forecasts are for winter and spring barley areas to fall by 1% and 13% respectively this year and, if so, could see a smaller domestic crop. However, currently 2024/25 ending stocks are expected to be well above average and as such it’s unlikely supplies will be particularly tight next season.
Oilseed rape
The AHDB planting survey completed in November 2024 indicated that UK growers have planted the smallest area of rapeseed in 42 years which could see UK rapeseed production in 2025 ranging from 643,000t to 912,000t – and would see a drop in tonnage from 824,000t in 2024, unless yields are well above average.
As at November 25, 2024, 73% of winter oilseed rape across the UK was rated as good or excellent but pest and disease issues continue to be watched.UK rapeseed imports are forecast to reach 875,000t in the current season, up from 743,000t last year Supplies come from the EU whose output is forecast to increase by 13%, while Ukraine’s production is estimated to drop by 14% due to poor weather which will impact availability and also the price of rapeseed over the coming month.
Rapeseed crushing is expected to slow later this season due to limited supply, which will result in lower tonnage of rapeseed oil and meal. UK oilseed rape demand is expected to fall from 1.9mt in 2033/24 to 1.71mt in 2024/25. However, demand may pick up later in the year if the EU’s production rises and more supplies are available as is expected, with a surplus of 19mt for this coming year.
President Trump’s tariffs on Canadian imports look set to come in after being delayed for a month and, as I write, the US has just imposed higher tariffs on imports from China, Canada and Mexico. This has led to Canadian canola becoming heavily discounted against EU rapeseed.
They are going to retaliate with their own tariffs which will affect US farmers who export their produce to these countries. Cereal and oilseed rape prices have a major influence on farmers’ final cropping decisions.
Globally, in recent years, the oilseed area has increased, partly because of price competitiveness with cereals. Typically farmers plan the main crops in advance, but there is still some scope for change up until planting time as weather can change plans as well.
We now have another major worry as President Trump suspends military aid to Ukraine so we have to wait to see what the outcome will be regarding prices and supplies in what could be a very volatile world very soon.
