New crop wheat at £176/t sparks concern for growers

Sentiment among arable farmers has been downbeat for much of the past year, with farmgate prices in descent and persistent weather challenges weighing on the sector.

A strong pound has only heightened these concerns, with UK wheat struggling to compete on the international stage.

Wheat is commonly traded globally in US dollars, and with sterling trading at a three-year high to the dollar at £1 to $1.36, it is making UK prices less competitive in global markets.

This has resulted in the AHDB forecasting a larger carry over of UK wheat into next season as exports continue to underperform.

See also: Malting barley premium erodes with prices under pressure

Grain analysts at CRM Agri estimate that, had the exchange rate held at similar levels to the start of the year before US president Trump’s inauguration, UK wheat futures could have been trading at £20/t more than current levels.

Sterling’s strength has also made imports more competitive, with HMRC trade data showing the UK imported 2.4m tonnes of wheat during the first nine months of the 2024-25 crop year, an increase of 744,000t compared with the same period last year.

At a global level there may be a glimmer of hope for growers, with reduced yield prospects in Russia, Ukraine, China and Australia providing some underlying support to prices.

In addition, the reintroduction of import quotas by the EU Commission on Ukrainian grain as of 6 June added some short-term support to Continental prices.

However, analysts warn this may impact global trade flows elsewhere, as Ukraine looks to export to new markets.

UK wheat remains under pressure, with spot prices collected by Farmers Weekly on 11 June putting ex-farm feed wheat at £157.5/t.

Looking ahead, new crop prices don’t appear much better, with UK feed wheat futures falling to £176.10/t for the November contract midweek.

Harvest prospects

The UK wheat area looks set to rebound from last year’s lows this harvest with plantings up by 6%, according to the AHDB’s Planting and Variety Survey.

More than 1.62m hectares of wheat have been planted across the UK, marginally below the five-year average of 1.65m hectares.

Millie Askew, lead cereals analyst at the AHDB, said:

“Growers had to fight the weather again last autumn to try to get back to their desired rotations after being forced to change the previous year, but this survey indicates it’s not been possible for everyone.

“The larger wheat area will help to mitigate the impact on 2025 production from the very dry spring we had this year.

“But there’s a lot of uncertainty over the prospects for all crops, including wheat, after such a dry spring.”

Barley plantings are pegged at 1.1m hectares, down 6% on the year, while the oat area is up by 13% year-on-year at 207,000ha.

Oilseed rape plantings have fallen by 19% on the year to 236,000ha.

The NFU has already warned that the recent dry weather has caused some issues for crops in the ground, however recent rainfall across much of the country has helped alleviate concerns.

Traders at ADM Agriculture say both domestic and EU prices remain near lows as crop prospects notch up following the recent rainfall.