Long-term driver offers insight into UK wheat prices
- Milling oat prices outperform
- Wheat prices move to long-term drivers
- Weather outlook - Outlook turns drier through mid-April
Price moves
*Red diesel prices have stabilised after being sent by the Iran war to their highest in nearly four years, when a price spike caused by Russia’s invasion of Ukraine was subsiding.
The UK average price has failed, yet, to breach 140p/l, let alone exceed 150p/l as it did in March 2022, reaching 151.29p/l. However, the stability of prices at their high level is starting to look notable. Values, which stood below 80p/l before the Iran conflict, have now stayed for more than a week above 130p/l.
Crude oil markets, a key influence on diesel values, continue to price in a retreat in oil prices through the rest of 2026. The premium of June-26 to December-26 futures has risen above 20%. Nonetheless, the December-26 lot is now prices above $80/Bbl, a price that spot basis had been achieved only once in the year ahead of the Iran war.
*Milling oat prices have returned above £140/t for the first time in five months. The headway reflects largely broader support from the Iran war to prices of grains, which have a decent correlation to values of crude oil.
However, oats have outperformed, in terms of closing below £30/t their discount to feed wheat,from levels above £45/t two months ago.
Support has been helped by a recovery in exports, which at 54.2Kt for 2025/26 are running ahead of average levels, as well as broader moves by users to cover grain needs at prices which remain modest by recent standards.
The £140/t level has provided resistance to previous oat price rallies this season.
UK wheat prices move to long-term drivers
UK wheat prices are showing increasing signs of following their long-term trends, in line with European wheat market and indeed wider global economic drivers.
High prices cure high prices.
Last year we highlighted the long-term trend in wheat prices over the past 25 years. This trend consists of new highs being scored in markets, driven by tighter stocks, weather shocks, geopolitics, or a combination of factors.
Globally growers have reacted to these higher prices and increased margins by increasing the planted area - a case of ‘high prices curing high prices’ – which in turn has led to increased supplies and lower prices.
The latest record prices were a result of Russia’s invasion of Ukraine, both major global producers and exporters, due to concerns over logistics and production in the region.
In response to increased profitability for growers, global harvested wheat area increased by 2.6Mha, to the largest area in 7 years 222.3Mha in response to the higher prices and favourable weather resulted in the record output and demand destruction as consumers rationed usage.
Low prices cure low prices
The opposite is now being seen, with prices having corrected lower and inputs remaining elevated, margins for global producers are under pressure, plantings have stalled and sellers are reluctant to release crops onto the market at current prices.
This in turn is leading a more supportive wheat market, with additional support coming from the war in Iran and higher energy and freight signs.
The current chart indicates a slightly more positive outlook for prices. However sustained energy price increases or global weather issues will be required to provide a meaningful price recovery.
UK weather outlook
The UK weather outlook has taken on a distinctly drier look.
Showers for the rst of this month will be limited largely to far western areas, particularly north western Scotland.
The forecast for the first half of April has turned distinctly drier too. Indeed, weather maps show a return to wetter weather not likely until late next month, and even then only for western areas.
While temperatures are forecast staying average at best, the outlook suggests benign conditions for farmers to catch-up on spring fieldwork and perhaps, looking further ahead, even make an early start to maize drilling.
