Milling wheat at £182/t as drought concerns heighten

UK wheat prices remain at the mercy of the global market, having struggled to get much traction at all so far in 2025, but they appear to be turning a corner.

Prices collected by Farmers Weekly put milling wheat at £182.3/t on 7 May, up by almost £6/t on the week.

A dearth of market drivers has left prices lacklustre, with further pressure coming from a potentially large carryover of wheat and adverse exchange rates.

See also: Wheat prices hit by weather and currency factors

Jonathan Arnold, trading director at Hampshire-based grain trader Robin Appel, said there was still a lot of unsold wheat on farms.

“Farmers don’t really want to engage at these levels on 2024 crop, let alone 2025.

“Everyone is mindful of how dry it is everywhere and what impact that might have.”

He suggested the major concern at the moment was the potential size of the carryover of wheat from 2024 to 2025.

“This year we have got a fairly big carryover and potentially a bigger wheat crop, so it doesn’t bode that well.”

Global grain markets remain uninspired, however reports of hot and dry conditions in China and the Black Sea region could impact supplies and offer some support to prices in the short term.

Crop conditions

The AHDB’s latest crop development report classed 60% of the GB winter wheat crop as in excellent or good condition at the end of April, down from 67% in March, but still notably up on the year.

Some 68% of winter barley was classed as good to excellent, while 74% of spring barley hit the required threshold.

Helen Plant, senior cereals analyst at the AHDB, said:

“Overall, prospects for winter crops remain encouraging compared to last year, though not as strong as in 2023 or 2022.

“Initial condition scores for spring cereals also look hopeful, but comparisons are not available due to the more rapid planting than in recent years.”

Mr Arnold said there was a bit of moisture deficit building for some crops, but added that generally, crops were benefiting from the sunshine, and in long hours of sunlight they soak it up.

The Environment Agency announced this week a “medium risk” of drought this summer unless there is sustained rainfall, after the driest spring in 69 years.

EU deputy director of water, Richard Thompson, said:

“The past two years were some of the wettest on record for England, but drier conditions at the start of this year mean a drought is a possibility and we need to be prepared.”

Exchange rates

Currency factors continue to weigh on the UK grain market, with a stronger pound against the US dollar making imports quite competitive and exports more expensive.

The exchange rate stood at £1 to $1.33 on 7 May.

CRM AgriCommodities say the impact of currency swings since January cannot be understated.

Analysts at the firm said: “At the exchange rates around when Mr Trump was inaugurated, UK wheat would be worth an extra £17/t.

“Global wheat values at current levels look precariously undervalued, with funds holding such a short position and global demand set to recover.

“A near-perfect global harvest will be required to help stocks rebuild in 2025-26, and for now, that is far from reality.’’