Global wheat surplus keeps prices in check into new year

A large global wheat surplus continues to dominate market sentiment despite other geopolitical drivers, keeping wheat prices at persistently low levels.

May 2026 UK feed wheat futures started the new year back below £170/t and closed at £169/t on 6 January.

Global grain markets appear lacklustre, trading cautiously ahead of the US Department of Agriculture latest World Agricultural Supply and Demand Estimates report, due for publication on 12 January.

See also: Wheat margin achievable in 2026 after tough year for growers

Traders at Dewing Grain say wheat futures remain under pressure and continue to ignore geopolitical tensions and the lack of progress on Russia-Ukraine peace talks, despite further Russian attacks on Ukrainian port and grain handling infrastructure.

Gary Phillips, country manager at ODA Connect, said grain markets were still being weighed down by very large harvests, although there was some evolution taking place in South America that might change some of this narrative.

 “We’re in a situation at the moment where the bearish elements on the international market also come to bear upon ourselves,” he added.

Mr Phillips said the UK was currently a net importer of old crop, due to a poor 2025 harvest and a relatively modest carryover from the previous year.

However, he suggested that the level of imports was still modest compared with what might have been needed.

Trade data published by HMRC shows UK wheat imports totalled 894,000t between July and October 2025, down from 1.15m tonnes during the same period in 2024.

Meanwhile, UK wheat exports increased marginally from 37,000t to 61,000t during the same period.

Mr Phillips added that farmers had been reluctant sellers, not just in the UK but across western Europe generally, which had meant physical prices ex-farm had been stronger than normal compared with futures.

He had also observed significant regional price variation, with a spread of more than £20/t for the same product depending on location.

Mr Phillips suggested that farm businesses in some regions such as Scotland, the North of England and the West Midlands could be receiving prices £10 above futures, while other regions such as the South East might be £10 below base levels.

New crop

A larger domestic wheat crop is expected this year as growers were able to get crops into the ground well during the autumn and early establishment has been good.

“Looking at the condition of the on-farm wheat crop, you’d be looking at a situation where farmers are probably happier about the establishment of that crop than they’ve been for three or four years,” said Mr Phillips.

Outlook

Scotland’s Farm Advisory Service has forecast that 2026 will remain challenging, as early indicators suggest another potential year of strong global production.

Mark Bowsher-Gibbs, principal agricultural consultant at SAC Consulting, said: “For UK growers, 2026 is shaping up as a year where success will depend less on outright price recovery and more on marketing timings, regional premiums awareness and risk-management.

“Without a sustained improvement in returns, the economic case for maintaining current levels of domestic grain production is going to remain under serious strain.”