SPRING planting in Scotland is well behind normal due to mixed weather, but this past week should have allowed major catch-up time for many across Scotland.

The high pressure should have arrived by the time you read this and grain and potato planting will be proceeding at top rate.

The Liffe May, 2017, old crop feed wheat futures last week moved down by only 65p to £147 and for November, 2017, new crop moved down by 50p to £137.05. This implies that there are no global concerns weather-wise for new sown crops for this harvest and the triggering of Article 50 to allow the UK to leave the EU has not caused any volatility in the market place either.

We are now into the third quarter of the 2016-17 marketing season and the first wheat from Europe will appear in June, but it is still at least four months away until the UK harvest starts.

In the meantime, farmers appear to have sold most of their grain and consumers look to have sufficient cover as well until harvest commences so unless another factor appears prices look set to remain steady for the time being at least.

There are slight concerns for the Kansas winter wheat crop in the US, with ratings at 38% due to dry conditions, compared to 56% at this time last year. But rain is forecast to help growing conditions soon.

EU crop conditions are generally good too, with some early but slight drought concerns in Poland, South Ukraine, Romania and Spain.

Another El Nino-related drought is thought likely to hit South Africa this year, threatening a rerun of the very dry weather seen in 2015 and early 2016 and the likelihood is put at a 50% chance later in 2017 and this is associated with drought and water scarcity.

This will not arrive in time to threaten the maize crop being harvested now and the current outlook is positive for winter wheat sowing. South Africa, usually a nett maize exporter, was forced to turn to international markets and remains an importer ahead of the current harvest, mainly due to the El Nino which peaked in late 2015 and early 2016 and brought widespread drought.

Global grain production is on course to exceed demand for a fourth consecutive year this season, which has been keeping pressure on global grain prices. However, early 2017-18 projections from the International Grains Council (IGC) suggest that this run of global surpluses could be coming to an end.

As demand continues to grow, both wheat and maize production are forecast to fall back slightly from this season’s record levels. Production of both wheat and maize are projected 3% lower than 2016-17 on slight dips in area, including the US, whose plantings are down 8% and at their lowest level since records began.

While a deficit is tentatively projected, global stocks were already high at the start of the season and the extra stocks expected to be added in 2016-17 would mostly offset a 3% fall in output and US stocks are at their highest level since 1988 and are up 17% on last year.

So what could this all mean for the UK? Despite global grain prices remaining historically low this season, UK prices have risen due to the tight domestic, EU supply situations, plus weaker sterling.

This has meant that UK prices have risen to a premium over global markets including the EU. Our relationship to global prices in 2017-18 will depend on the size and quality of the UK crop and external factors, such as the value of sterling.

Unless we see a tight domestic situation again next season, UK prices will need to be more competitive against global levels to stimulate exports.

Our new crop futures values are around £9 below old crop May, 2017, futures and are also showing a more competitive alignment to global levels than this season at least.

The 2017 UK wheat harvest is forecast at 8.16 tonnes/ha compared to 7.89 tonnes/ha in 2016 and this would see a 2017 crop of around 14.65m tonnes, compared to 14.4m tonnes last year.

The IGC forecast global wheat production at 735m tonnes, down from 754m tonnes last year, usage would be up 3m tonnes to leave end stocks down 5m tonnes at 234m tonnes.

Oilseed rape prices dropped by £11 per tonne last week and then rose by £4 earlier this week as the weaker pound gave some support to UK markets.

Soya prices have struggled as the latest USDA report indicated US soya stocks 13% higher than a year ago at 1.71bn bushels and the expected US soya plantings forecast at a record 89.5m acres.

Global oilseed rape and canola prices are likely to continue to follow soya markets, as approximately 350m tonnes of soya are produced compared to 62m tonnes of OSR.

Over the past 10 years, the year-on-year growth in global edible oil usage from palm, rapeseed soya and sunflower seed has averaged 4%, with usage forecast to expand once again this year. Therefore, any reduction in biofuel demand from potential policy changes in the EU and US is more than likely going to be compensated for by a rise in edible oil usage.