Wheat Market Update - 17th April 2025
Welcome to this week’s market update! Each week, we'll delve into the market movements and key factors affecting wheat prices. Whether you're a fellow industry professional, a supplier, or simply interested in what’s happening in the market, our updates will offer valuable insights to keep you ahead of the curve.
Weekly Price Summary
May 2025 LIFFE feed wheat futures closed at £170.00/t, down £2.50 weekly. Down £1.00 since the last market report
November 2025 contracts settled at £186.00/t, a decline of £1.60 on the week and down £1.20 since the last report
UK wheat prices have dropped back over the last week, but overall are up slightly vs the last market update.
Key Drivers Pressuring Prices - Competitive Russia Wheat Exports, Rain Forecast in the US, improved crop outlook in France and strengthening sterling pushing down the London Futures (-2%) further than the Chicago Futures (-1%)
Why do Agricultural Commodities Fare Better in Tariff Wars and Market Turmoil?
Essential Nature of Food Demand
Agricultural commodities like wheat, corn, and soybeans are staple goods with relatively inelastic demand. People need food regardless of economic conditions, so consumption of basic agricultural products remains stable even during trade disruptions or market volatility.Global Trade Redirection
Tariff wars disrupt specific trade routes but don’t eliminate global demand. Countries facing tariffs often redirect exports to alternative markets, while importers source from other suppliers. Agricultural commodities benefit from this flexibility due to their standardised nature and global demand.
While agricultural commodities generally fare better, they are not immune to tariff war impacts:
Export-Dependent Regions Suffer: U.S. Midwestern farmers, for instance, face significant losses from China’s 125% tariffs, with soybeans and corn hit hardest.
Retaliatory Tariffs Hurt Specific Commodities: China’s 15% tariffs on U.S. wheat and corn in March 2025 have reduced export competitiveness, though global redirection mitigates broader price impacts.
Long-Term Risks: Prolonged trade wars can lead to permanent market share losses (e.g., U.S. soybeans to Brazil), challenging specific producers even if global prices hold
UK Focus
Key Market Drivers
Bearish Factors:
Improved Supply Outlook: The UK wheat crop in 2025 is projected at 12.5 million tonnes, a 12% increase from last year, though still below the five-year average of 13.9 million tonnes.
Reduced Import Demand: With domestic production recovering, import levels are expected to decrease from the record highs seen in the previous season.
Sterling Strength: A firmer pound makes UK wheat less competitive on the export market, potentially dampening demand.
Bullish Factors:
Weather Concerns: We are currently in a weather market, where crop growing conditions are crucial, and variability in weather will see markets react. We had been lacking rain up until this week, where we have seen certain areas get a good dose.
Global Market Influence: International factors, such as reduced US wheat plantings and potential export restrictions from major producers, may support UK prices, as UK markets tend to follow global movements.
Trading volumes on the LIFFE exchange have been moderate, with market participants closely monitoring weather developments and global market trends.
Global Focus
Key Market Drivers
Bearish Influences:
Crop Supply: European wheat markets have also felt the pressure this week from competitive Russian exports. Improved weather in Russia alleviated some concerns around new crop, pushing export prices lower. However, the actual condition of the Russian crop remains a key watch point, given the prolonged period of drought some key growing regions have experienced. The French farming ministry has estimated that they will see at 10% increase in the soft wheat area compared to 2024.
Improving Weather Conditions in the US: The USDA reported that 47% of US winter wheat was in good or excellent condition as at 13 April, down from 48% a week earlier, with around 32% of the winter wheat area being impacted by drought as at 8 April. However, weather forecasts predict beneficial rains in the US wheat belt next week. These forecast rains have weighed down on global wheat markets.
