AT THE end of another year and we have many of the same issues and problems we had at the end of last year, but we have added another, called Brexit – our vote to leave the EU.

Obviously, this is causing much discussion and uncertainty, but in the short term at least it has made commodity prices go higher as a result of weaker sterling against the euro and the dollar.

But Brexit discussion continues to rumble on and a lack of transparency means grain markets are operating with a lack of proper information.

Further declines in recent weeks saw sterling hit a seven-year low against the euro and a 31-year low against the dollar. This means that, despite the weakness in US grain markets, a rapidly strengthening US dollar helped firm prices in the UK.

Over the past week, the UK's May, 2017, wheat futures gained almost £2 per tonne, despite falling nearly $3 per tonne in dollar terms. In the same time, the US dollar has made its largest weekly gain against sterling in over two months.

This meant that over a week, while Chicago's May, 2017, wheat futures lost $4.50, UK May, 2017, futures rose £1.80 per tonne to close at £139.30 per tonne.

The balance of the world’s top wheat exporters is changing. Since the Great Train Robbery in 1972, the share of global wheat exports attributed to Russia has increased from 2% in 1972-73 to a projected 31% in 2016-17 and it is forecast to become the largest global wheat exporter this coming year, with 30.7m tonnes.

Favourable cooler conditions during yield formation could even raise production to as much as 105.8m tonnes in total. On the other hand, hot temperatures from January to March could lower that production to 93.5m tonnes.

EU wheat exports are forecast to decline significantly from 33.9m tonnes in 2015-16 to 25.5m tonnes in 2016-17. The decline in exports from the EU is largely driven by poor harvests, particularly in France where soft wheat supplies are forecast to drop by 30%.

The global maize market looks set to remain stable, at least in the short term, with production forecast by the USDA to continue growing. With regard to EU supplies, the Black Sea region looks set to remain a key provider.

Total Ukrainian exports of maize in 2016-17 are forecast to grow by 7% to 17.7m tonnes. Russia is also expected to continue an expansion of maize production, growing from 3.1m tonnes in 2010-11 to 14m tonnes in 2016-17.

French maize production is forecast to hit the lowest level since 1990-91 at 11.45m tonnes and is 12% lower than last season’s 13.06m tonnes. Adverse weather conditions throughout the summer plus a 9% decreased harvest area all contributed to the overall fall in output.

From an UK perspective, a smaller French maize crop on paper reduces the competition for UK feed wheat. However, despite France being the largest maize producer in the EU, it is not the only source of the feed ingredient, with non EU producers such as Ukraine becoming more competitive.

The proportion of EU maize grown from genetically modified seed this year has reached a record level, as European farmers this year planted 136,337 ha of genetically modified maize from the only Monsanto product MON810, licensed 20 years ago and the only one approved for growing in Europe. However, this area is minimal compared to the 8.8m ha of maize that was planted overall but the GM area represents 1.6% of the maize area planted and is an increase of 19,000 ha and the biggest proportion since MON810 was approved in 1998. Some 130,000 ha of MON810 were planted in Spain where 35% of their maize area was GM and the yield rose by 8.5t/ha to 11.5t/ha.

Global supply and demand for barley is looking tighter this year, with consumption forecast to exceed production. Global barley trade is expected to decline in 2016-17 and the latest forecasts see barley exports falling by 12% year-on-year to 25.7m tonnes.

Within the EU, the reduced availability of barley is met by an increase in domestic demand, coinciding with fewer imports by China. Whilst total supply is forecast by the EU to be 2.9m tonnes lower this year, domestic demand is forecast to increase by 1.m tonnes.

Once the UK has left the EU, we are likely to see a more finely balanced malting barley supply and demand for the remaining 27 member states.

The UK is set for interesting times with the availability of both wheat and barley feeling the squeeze on the back of reduced production levels.

AHDB has forecast a 12% fall in UK wheat production in 2016-17, pegging it at 14.5m tonnes. The fall in production is forecast to leave the surplus of wheat available for either export or free stocks 71% lower than in 2015-16, highlighting the squeeze in UK supplies.

Furthermore, the availability of barley is forecast to decline by 10%, emphasising an overall tightness in UK cereal production.

The main thing we know about Brexit is that there are a vast number of unknowns, such as the movement of currency, the level of farm support that will be provided and how will the structure of trade agreements be dictated with the UK's most important destinations?

This time next year, this article has every chance of beginning with the same observations as this one, as Brexit will still be at least a year away and there could be the threat of a Scottish referendum to contend with too – so who knows what farming fortunes will be like in 12 months from now.

In the meantime, make the most of the rest of the festive season and I wish you all a prosperous New Year.