Wheat flutters around £172/t amid US-Iran talks uncertainty

UK wheat futures have been fluctuating between £170/t and £175/t for the May 2026 contract, as markets react to a rapidly evolving situation in the Middle East.

Volatility has presented some short-term selling opportunities for growers, with prices lifting by up to £10/t on month-earlier levels.

However, this does not compensate for what has been a tough year for cereal growers, with wheat prices still below year-earlier levels and soaring farm inputs, such as fuel and fertiliser, squeezing margins.

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Speculation of talks between the US and Iran weighed on global grain markets as Farmers Weekly went to press midweek, with Chicago wheat futures down 4% on the week.

Andrew Kanyemba, senior grains analyst at market insight firm Expana, expects the impact of rising global nitrogen fertiliser prices to be more significant for next year’s wheat crop.

He said: “At this stage, there are no immediate nitrogen shortages in the EU.

“Farmers have already secured most of their requirements earlier in the campaign, partly in line with seasonal buying patterns and partly to avoid higher costs linked to recent EU trade policy changes.

“However, higher prices are narrowing options for the next crop cycle. The immediate risk is that some EU farmers may slightly reduce their application rates for the 2026 crop, as they look to manage exposure to higher-priced inputs ahead of the 2027 harvest.”

He said the main impact of reduced application rates for the 2026-27 crop was likely to be on quality rather than yields, which could tighten the availability of milling wheat and widen the spread between milling and feed wheat.

Meanwhile, the International Grains Council has forecast world grain output to fall in 2026-27.

Supply chain impact

The conflict in the Middle East is impacting the whole supply chain; however, major agricultural supplier Wynnstay appears to be weathering the storm.

At its AGM on 24 March, it confirmed that trade during the first four months of the financial year were ahead of the same period last year.

It added that while there remained a risk of cost inflation, including fuel and other inputs, arising from ongoing geopolitical uncertainty, it was not expecting it to have an adverse impact on the business.

Outgoing chairman Steve Ellwood said: “The arable division has traded strongly, reflecting a solid first quarter in fertiliser, with higher year-on-year volumes.

“The division has also benefited from the realisation of a long stock position in a rising and volatile market during March, influenced by events in the Middle East.”

He said the impact on the business would largely depend on the duration of the conflict, any disruption to supply routes, and global commodity price movements.