Business and Policy December 2025 – Arable

Global grain markets continue to be shaped primarily by developments in the United States, where political signals, export activity, and the USDA’s supply assessments are setting the tone for world prices.  China’s purchasing behaviour remains the primary demand-side influence: substantial recent buying of US soyabeans has provided support for the oilseed complex, though no confirmed purchases of US wheat or maize have yet emerged.   

Markets remain highly sensitive to any indication that China may expand its buying programme, and this uncertainty continues to generate volatility across global futures, feeding directly into UK and European pricing.  Import demand elsewhere is also building, with Saudi Arabia tendering for significant wheat volumes, and within Europe, strong Chinese demand for barley is helping lift EU exports well above last year’s pace. 

On the supply side, the global picture remains dominated by heavy stocks and strong production estimates highlighting ample supply and continued price pressure; the global wheat stocks-to-use ratio, excluding China, is at its highest level since 2021/22.  In Europe, a major revision to EU export and import data has significantly tightened the balance sheet.  Exports are now broadly in line with last year, while imports have fallen sharply following Ukraine’s removal from the free trade arrangement.  Even so, EU grain must still compete with aggressive pricing from Russia and Argentina, both of which maintain strong export programmes. 

Weather conditions across the Northern Hemisphere currently look favourable for 2026 winter crops, adding to the bearish supply sentiment.  Within the UK, cropping intentions show increases in wheat and oilseed rape areas but a marked contraction in barley and oats, which will tighten domestic availability further ahead.  Scotland, despite producing a substantial barley crop, has seen significant quality issues limiting suitability for malting and pushing large volumes into feed channels.  This dynamic contributes to a complicated supply picture in which physical availability exists, but usable malting supply is constrained. 

 

Crop-Specific Markets 

Wheat 

Wheat markets face sustained downward pressure from large global supplies, rising stocks, and early signs of favourable Northern Hemisphere crop establishment for 2026 harvests.  Meanwhile, the International Grains Council has increased global production estimates to 830 Mt, reinforcing the bearish supply backdrop. 

The UK wheat area is expected to rise slightly, up 1% for harvest 2026, suggesting stable domestic availability.  UK feed wheat futures have drifted lower as earlier optimism about the scale of Chinese commodity purchases begins to fade and near-term price direction will depend largely on whether China broadens its buying beyond soya, on South American weather, and on any currency movements that impact EU competitiveness.   

Malting Barley 

The malting barley sector remains subdued, with limited demand and ongoing quality challenges.  The UK winter barley area is forecast to fall by 2%, and spring barley plantings by 15%, bringing the total UK barley area for 2026 to its lowest level since 2010.  These reductions set the stage for tighter future supply, particularly for malting varieties.   

Scotland faces a particularly challenging situation as many growers struggled to achieve malting specification and large volumes have therefore been diverted to feed markets. This has created a supply imbalance where physical tonnage is ample, but usable malting supply is constrained.  Weak demand from maltsters compounds the issue, and structural signs, such as the confirmed closure of Baird’s Malt’s Pencaitland plant and cost-reduction measures at Simpsons Malt, signal a market undergoing medium-term reorganisation. 

With the spring barley area set to fall sharply, harvest 2026 carries perhaps a more supportive long-term tone, and a late-season squeeze cannot be ruled out if quality supplies tighten further. 

Feed Barley 

Feed barley markets are more active than malting barley, supported by strong export demand from Ireland, Spain, Portugal, and the Dutch market.   Domestic feed demand is strengthening as colder weather sets in, and barley remains competitive in rations; although recent rises have eroded some of its advantage over other feed grains.  Farmer selling is expected to slow in the run-up to the festive period, likely supporting market values.  New-crop markets remain quiet but are expected to firm as the impact of reduced spring barley sowings becomes more visible.  Overall, the outlook for feed barley is steady to firm, underpinned by export demand and tightening forward supply. 

Oilseed Rape 

Oilseed rape was the stand-out crop this season, with the area increasing 30% year-on-year for harvest 2026, a notable rebound from the forty-year low recorded in 2025.  Global oilseed markets however remain volatile.  Soyabean prices have swung sharply, influenced by USDA estimates, uncertain Chinese buying, and evolving US biofuel policy.  Crude oil markets are similarly unstable, with geopolitical events briefly lifting prices before inventory builds and diplomatic developments pull them back, contributing to intermittent volatility in vegetable oils. 

Oats 

The UK oats area is forecast to decline by 14% for 2026, returning close to 2023 levels. The European oat market is effectively at a standstill: farmers believe prices have fallen too far to justify selling, while buyers perceive ongoing oversupply and expect further softening. This stalemate has led to minimal trade. Some regional factors are providing limited support.  

Turkish demand continues to underpin milling oats, while newly agreed Sweden–China trading terms could stimulate future movement. Scandinavian exporters shipped heavy volumes early in the season at low prices, likely reducing their remaining surplus.  As a result, additional demand may shift toward UK oats later in the season.  

Feed demand for oats is slowly improving across Europe, supported by reduced farmer selling and a wide discount relative to other feed grains.  In the UK, some growers are choosing to feed oats on farm rather than market them, further reducing supply availability. Compounders are gradually increasing inclusion rates as oats represent good value. While prices remain low, the combination of reduced plantings and stabilising demand suggests the market may be finding a floor. 

 

Mark Bowsher-Gibbs, Mark.bowsher-gibbs@sac.co.uk 

 

£ per tonne		Dec ‘25	May ’26	Nov ‘26
Wheat	Ex farm Scot Dec.  May/Nov 26 Futures	178	173	176
Feed Barley	Ex farm Scot Dec.	161		-
Malting Barley	Ex farm contracted price	175	-	-
Milling Oats	Ex farm contracted price	152
Oilseed Rape	Del Montrose	408	412	-

 

Indicative grain prices 25th November 2025 (Source: SAC//United oilseeds/AHDB/Hectare)