Will Lower Milling Wheat Prices Hold, or Is a Rebound on the Horizon?

The UK wheat market is navigating a period of uncertainty, with prices slipping across key contracts. Global influences, including US tariffs, improved weather conditions, and shifting currency dynamics, are adding pressure to an already oversupplied domestic market.

At the same time, new crop planting has been strong, raising hopes of a larger wheat harvest—but will favourable weather hold? And how will global volatility impact UK farmers and buyers in the months ahead?

 

Global Wheat Market: A Downward Trend with Hidden Risks

Wheat prices have been in steady decline since mid-February, driven by a combination of trade tensions, strong crop expectations, and currency shifts:

• US tariffs are reshaping global trade, raising uncertainty for key exporters like Canada and the EU.
• Weather conditions in the US and Russia have improved, allowing crops to develop well.
• French wheat crop ratings have been revised slightly higher, adding to downward price pressure.
• Australia has increased its wheat production estimate from 31.9 million tonnes to 34.1 million tonnes, reinforcing global supply.

Despite these factors, global cereal stocks remain tight. Any unexpected production shortfalls from major exporters could quickly reverse the downward price trend.

 

Meanwhile, Canadian wheat prices have weakened, largely due to a falling US dollar. Initially strong after Trump’s election, the dollar has since slipped as markets digest the risks of US trade policies. This has added further downward momentum to Canadian wheat values, influencing the UK market.

 

UK Wheat Market: Falling Old Crop Prices & New Crop Uncertainty

 

Old Crop Milling Wheat: Lower Prices, Unsold Stocks

In the UK, old crop milling wheat premiums are under sustained downward pressure, mainly due to:

• Strong imports, which are keeping domestic prices in check.

• Higher-than-expected stocks, as some farmers hold back supply in hopes of price recovery.

• Soft demand, which is limiting market support.

 

New crop milling wheat premiums sit £9 per tonne above the May 25 premium, reflecting some market optimism—but old crop values remain weak.

New Crop Outlook: Will a Bigger Harvest Keep Prices Down?

Favourable planting conditions have resulted in a larger winter wheat area, raising expectations for a bigger harvest than last year. However, this increase in supply could further pressure prices, especially if demand remains sluggish.

 

The market is now entering a weather-sensitive period—any major weather event, such as spring frosts or drought conditions, could quickly shift sentiment and impact pricing.

 

Soft Wheat: A Tight Market, But Relief Ahead?

Soft wheat remains in short supply, pushing premiums to historically high levels. However, more soft wheat has been drilled for the coming season, meaning availability could improve later in the year.

 

Buyers should remain cautious, as market sentiment can shift rapidly. Locking in contracts early may mitigate risks if availability does not improve as expected.

Key Risks & Opportunities for UK Buyers & Farmers

Risks to Watch:

• Further price pressure on old-crop wheat due to slow demand.

• Global trade uncertainties—US tariffs could shift pricing in unexpected ways.

• Weather volatility—a dry spring or adverse conditions could impact UK yields.

 

Potential Opportunities:

• Cheaper wheat could benefit millers and bakers, providing cost savings on flour.

• Farmers who secure contracts early may lock in better prices before further potential declines.

• Soft wheat supply could improve, easing pressures for the UK milling sector.

 

Summary & Outlook: Where Next for UK Wheat Prices?

With old crop prices struggling and new crop expectations rising, the UK wheat market is poised for significant change.

• Old crop milling wheat prices remain under pressure due to oversupply and imports.
• New crop wheat planting has increased, but weather risks remain a key factor.
• Soft wheat availability remains tight, but this may improve later in the year.
• Global factors, including US tariffs and currency movements, shape market direction.
• Buyers and farmers should watch market signals closely and consider locking in forward contracts to manage risk.

 

The next few months will be critical in determining price direction. A price rebound is possible if global stocks tighten or weather conditions deteriorate. However, if favourable conditions persist, we may see further price weakness as supply builds.