Subdued market weighs heavily on grain prices

Growers continue to hold cereal crops in store in the hope of better prices amid a subdued grain market. UK wheat markets remained thin during January with farmers weighing up their options. At the same time, commodity trader ADM reported limited urgency from consumers.

“In the near-term, grain markets are likely to remain choppy but capped, with wheat lacking a clear bullish catalyst amid fierce export competition and comfortable stocks,” said ADM in a market report dated 22 January. Feed barley markets were reported as flat due to weaker export demand. Citing a continued lack of farmer selling, ADM said many growers had been slow to re-engage after the festive period.

Export demand

Meanwhile, feed barley markets flatlined with export demand dwindling – although domestic demand remained. Farmer selling improved on pre-Christmas levels but was slower than recent weeks with prices becoming stagnant. Separately, grain futures came under pressure after the USDA’s latest World Agricultural Supply and Demand Estimates report showed an increase in global wheat supplies.

Feed wheat futures towards the end of January were trading at £167.25/ tonne for May 2026 and 171.40/t for November 2026. On the spot market, feed wheat was trading at £164/t – about £13 down on the same time last year, according to the Agriculture and Horticulture Development Board.

A good autumn planting season in the UK is again expected to see a larger area drilled to winter cereals compared to spring crops – the hope will be that higher yields and a decent harvest will help offset pressure on prices. Looking at the 2026 wheat crop prospects, the AHDB says market participants are paying close attention to global weather events – including dry weather in the USA and severe frosts in parts of Ukraine.

Forecasts

Commodity experts Expana slightly increased its forecast for the EU 2026 soft wheat crop, raising it from 128.3 Mt in December to 128.6 Mt. Growing conditions remain favourable for winter crops across most EU countries, says the AHDB.

Looking even further ahead, analysts at the International Grains Council forecast that the 2025/26 global wheat crop will be the largest ever, with strong yields more than compensating for a modest reduction in acreage.

While a repeat of such excellent results is not expected in the 2026/27 season, the IGC says increases in average yields could lift world wheat outturns to consecutive peaks in the following four years. Constrained by soft prices, the IGC expects the world harvested area to drop slightly in 2026/27. This would mark a third successive reduction and the smallest area in seven seasons.