Wheat Market Update - 2025 Harvest Begins
Please note the dash is now based off of the Nov-25 Futures
I. Executive Summary
An early harvest has now begun in the UK. With initial cuts looking strong on protein, and with good hectolitre weights. Yields are also not looking too bad locally to Harlow, where we are seeing 7-8 tonnes per hectare. However, this isn’t the story nationally, and there are regions on lighter land that are suffering with lower yields. Harvest is progressing at a rapid rate since the last report. Futures prices generally declined, reflecting global trends, despite low farmer selling. Despite concerns about the reduced planting of Group 1 milling wheat, the feeling among our merchants is that this isn’t a problem in our locality; we should have good access to Group 1 milling wheat this coming season.
II. UK Focus
The 2025 UK harvest is off to its earliest start since at least 2006. By July 9th, 10% of the UK winter barley area was harvested, ahead of the five-year average. Initial winter barley yields are generally positive, estimated at 6.9 t/ha nationally, 2% above the five-year average, though straw volumes are low.
The AHDB projects UK wheat output at 12.8 MMT, a 17% increase year-on-year. The planted area for harvest 2025 is estimated at 1,623 Kha, up 6% from last year but still slightly below the five-year average. We are due to see new crop wheat at Harlow and Ponders End in the coming weeks.
Results so far are looking positive for winter wheat, although it is early days as we have seen between 5% to 10% cut so far. Currently, protein levels are higher than expected, with strong hectolitre weights being observed. Yields have suffered in parts of the country as a result of having the driest spring in 150 years, a key growing period for winter wheat. As a result of this lack of moisture, the plants would have produced fewer tillers and fewer kernels, which would explain lower yields and higher protein content.
III. Global Focus
Global wheat markets experienced fluctuations and declines from June 23rd to date, 2025. After a strong week ending June 20th, profit-taking led to a pause in upward momentum. Despite a fundamentally bearish supply outlook, geopolitical tensions, especially in the Middle East, continued to inject volatility. However, as war risks subsided, markets refocused on fundamentals: ample global supply, record South American corn crops, improving weather, and sluggish demand. This suggests wheat prices may need to be cheaper to remain competitive. Managed money funds, accounting for over 50% of open interest, contribute to volatility, with their trading activities amplifying short-term price swings.
Global wheat production for 2025/26 is largely projected to be robust, with the International Grains Council (IGC) forecasting a new peak of 806 million tonnes. This is supported by anticipated large crops in Argentina, Canada, India, and the EU. The July 11th USDA WASDE report slightly increased the 2025/26 global wheat production forecast to 808.6 million tonnes.
However, global ending stocks present a more nuanced picture. The USDA's June 2025 WASDE report indicated a reduction to 262.8 million tonnes , and the July 11th report further lowered it to 261.5 million, mainly due to reductions for Canada and the EU. This suggests that while production is high, consumption and trade are also robust, preventing significant accumulation of reserves.
Regional forecasts show variations: the EU is poised for a strong recovery (130.7-143.1 MMT) , Russia's production is forecast at 83-90 MMT , and Ukraine's at 23-23.68 MMT. US winter wheat production is up 2% , while Australia's wheat production is forecast to fall by 10% to 30.6 MMT due to low soil moisture. India expects a record crop. Flour customers needing specific qualities should look beyond aggregate figures, as localized issues could lead to tighter supply and premiums for certain types.
