NEAR THE of the first month of January and we've not seen any real signs of hard winter weather to affect crop potential.

Met offices have recently confirmed a trend of warmer weather with, for the third year in succession, global surface temperatures rising. In 2016, it set a new record at 0.99°C above the mid-20th century average and 1.2°C above pre-industrial levels – 2017 appears to be setting off in the same pattern of warmer than average.

It said that 16 of 17 hottest years since 1880 had been this century and 2016 temperatures across the UK were higher than usual, at 2.1°C above the 1981-2010 average. Scotland was even warmer, at 2.5°C above the long-term average.

However, 2016 was only the 13th warmest year in the UK since 1910, but 2016 was the hottest year on record around the world and the mean temperature is expected to be confirmed as 9.3°C – the warmest year since 1910 was 2014 with an average temperature of 9.9°C.

Global warming caused by greenhouse gas emissions from human activities and the EL Nino weather phenomenon was also responsible in the early part of the year for the rise in temperature but carbon dioxide and methane concentrations rose to new record levels which both contribute to climate change.

Scotland has been pro-active in climate change targets by generating more of its electricity needs from renewables and has already exceeded its 2020 target, achieving a 42% emissions cut six years early. It hopes to reduce emissions by more than 50% by 2020 and 80% by 2050.

Following the UK Prime Minister’s Brexit speech last week, sterling firmed for a short spell and saw wheat futures drop before climbing again. That meant that May, 2017, Liffe feed wheat futures climbed to a contract high of £150.75 at one point, but closed the week up £1.85 at £150.10.

Driving the May, 2017, price to its contract high were a number of factors, mostly specific to the 2016-17 season. The main one is tighter UK wheat supplies and a lower exportable surplus. While the generally weaker sterling has played a part, it has not been the only driver.

Many of these factors are less applicable to the 2017-18 season, as at this time, the UK November, 2017, wheat futures have not risen to the same extent as May's. November, 2017, futures at the end of last week rose by 20p to £138.15 and for November, 2018, were up 35p to £141.35.

UK old crop wheat futures rallied as a result, and have surged more than new crop futures in recent weeks. The gap between the two reached more than £11 last week, compared to the same point last year for the equivalent contracts when November, 2016, was at a £9 premium to May, 2016.

UK wheat exports from July to November totalled 990,000 tonnes, compared to 740,000 last year. That makes supplies tighter and barley exports were down from 650,0000 tonnes last year to 570,000 tonnes.

A stronger pound and firm domestic prices have reduced exports and wheat prices in the UK could well be reaching import parity in some parts of the country. Premium markets for quality wheat remain poor as prices are caught between a strong feed market and over-supplied milling wheat market.

This is shown by price comparison of bread milling wheat ex farm only up last week by 60p to £144.20, while feed wheat was up £2.50 to £141.80. Feed barley was up £2.90 and oilseed rape delivered Erith was up £4. to £372 per tonne.

The UK's wheat crop for 2017 is now put at 14.16m tonnes, similar to the 14.5m tonne crop of 2016. The total barley crop is forecast at 7m tonnes, up from 6.6m tonnes last year.

UK feed barley prices remain supported by good domestic demand and animal feed compounders across the country are using more barley than expected. This means that in some parts of the country, barley is getting hard to source, making prices that are well above the export equivalent.

With a UK barley surplus around 1.3m tonnes, trade estimates are that about half of this had been exported by the end of December. With malting demand remaining strong, it could be that this surplus will be moved before the end of the season.

With warmer temperatures and spring not far away – we hope – an early planting survey has suggested that the UK’s barley area will rise by around 12%. This is being reflected by demand for seed, with some of the most popular varieties being nearly sold out.

Very little of this extra barley is expected to be grown in Scotland, but English growers are turning to it as an extra spring crop to help manage their black grass problems there, but hitting stale seed-beds hard with herbicide before the crop goes in.

Globally, wheat production for 2016-17 has again been revised upwards to 752m tonnes, compared to 736m tonnes in 2015-16. This is partly due to a large Australian harvest, which has increased 5.2m tonnes up to 33.5m tonnes, compared to 24.2, tonnes last season.

There was also a revised increase in tonnage in wheat production in Argentina, EU and Canada which offset a reduction in India from 93.5m tonnes to 86m tonnes.

Consumption has been forecast slightly higher at 738m tonnes compared to 720m tonnes in 2015-16. But, season end stocks are put as hitting 235m tonnes, which is 14% higher than at the end of 2015-16, which does not offer much long-term hope of prices rising.