Grain markets volatile as Iran conflict pushes up costs

Global grain markets have fluctuated widely in the past week as a result of the ongoing conflict in the Middle East.

May 2026 UK feed wheat futures rallied to £175.40/t on 9 March, its highest price since mid-November.

Prices settled back midweek to roughly £170/t but remain above month-earlier levels.

See also: Fuel and fertiliser prices soar as Middle East tensions rise

The cost of shipping grain has also lifted as a result of the conflict, with fuel prices rocketing, insurers pulling cover, shipping routes adjusted and freight costs climbing.

The uptick in grain markets has presented a potential selling opportunity for growers, helping to inject some cash into farm businesses, especially with farm input costs such as fuel and fertiliser increasing dramatically.

Anthony Speight, senior analyst at the AHDB, said: “The military escalation involving Iran has disrupted exports and raised fears about supplies from the Gulf. The near‑closure or severe risk around the Strait of Hormuz is key for driving markets.”

He added: “The longer the conflict goes on, the greater the potential implications for new crop prices, production and margins.

“Impacts could be most notable for the 2027 harvest, as input costs into these crops could be significantly higher if escalations continue.”

However, global grain markets remain fundamentally well supplied, which has kept any major grain price rallies in check.

The latest US Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates report on 10 March did little to improve market sentiment, with global wheat stocks remaining high.

The USDA report projects larger global supplies and consumption, but with reduced trade and ending stocks for the 2025-26 crop year.

Traders at Norfolk-based merchant Dewing Grain said the report had minimal market impact and underlined the lack of any genuine supply tightness in wheat.

Market insight firm Expana says it expects grain imports to the Middle East to be slashed, with wheat imports revised down by 600,000t and maize imports down by 1m tonnes.

The magnitude of the reduction would depend on the duration of the conflict.

If it lasts for one to two months, Expana says these countries could use existing stocks without impacting demand.

Analysts at the firm said: “Cereals market fundamentals are likely to remain weak in 2025-26, and unshipped exports to the Middle East would accumulate with exporting countries or be redirected to other importing regions such as Asia or Africa.”