By The Gleaner

With yet more dull, damp weather and strong winds, the harvest cereal and bean harvest is now more or less over.

However, potato lifting still has a long way to go and there is still a lot of winter crop to go into the ground. For many farmers this means that it could be the end of October before winter crops are sown – that rules out OSR, oats and winter barley, so the time frame will only now suit winter wheat.

The provisional cereal and oilseed harvest results for Scotland were announced recently, but as harvest was still in full swing in North Scotland, it would appear to be a bit premature to believe the quoted figures at this stage until harvest is well and truly completed. Also, in some areas, the failure rate on distilling varieties has increased significantly in the last two weeks – I understand that more than 50% of lorries arriving at merchants' stores are being downgraded to feed.

Defra has confirmed the provisional 2017 UK wheat production at 15.2m tonnes, which would be up from 14.4m tonnes from last year, but the trade and others are sceptical of this figure. Farmers have experienced differences between fields, varieties and moistures and the full details of how Defra reached its number are yet to be published.

UK barley production is put at 7.36m tonnes, up from 6.65m tonnes. That would give an exportable surplus of 1.781m tonnes, considerably up from the 1.056m tonnes that left the UK last season; oilseed rape is put at 2.18m tonnes, 23% up from 1.78m tonnes in 2016; and oats are estimated up 15% at 940,000 tonnes.

The UK rapeseed area was 2.8% lower in area year-on-year but yields averaging 3.9 tonne per ha were up 26% from 2016 and matched the record levels seen in 2015. As a result, we can expect the UK to regain nett-exporter status this season.

The EU is by far the main export market for our rapeseed, where the majority of rapeseed oil is produced from rapeseed crushed for biodiesel.

The first AHDB supply and demand figure following the potential 15.2m crop, estimates an available tonnage of around 2.76m tonnes, which is 14% lower year-on-year That would leave an exportable stock of around 1.6m tonnes, with UK demand remaining strong from the human and industrial sectors, including increased distilling and continued bioethanol demand.

This exportable tonnage is some 37% lower than last year, but at current prices it won’t be competitive to export from UK ports in the near future.

EU wheat exports at 5m tonnes to date are down from 7.7m tonnes at this time last year, while barley exports at 1.3m tonnes are only slightly down and maize imports stand at 3.9m tonnes, up from 2.5m tonnes last year.

French soft wheat exports to other countries within the EU are expected to be the highest in 11 years, at 18.36m, or 7m tonnes higher than last year.

EU cereal planting will, after three years of decline, rise for the 2018 harvest and follows a lower planted area of nearly 1m ha from 2014-15 to 2017-18 due to in part, difficult conditions for planting rapeseed. Wheat will see a rise in area but barley will see a bigger rise of around 1% of winter crop and 3% of spring varieties.

Global grain markets still have strong volatility, despite apparently high global stocks as the world in 2017-18 looks like seeing a fifth year of grain production surplus. Flagging supply risks, especially in wheat, means the recipe is there for continued volatility.

China has, for example, a growing supply of wheat not available to the world market and there is a real divergence between global wheat stocks and accessible wheat stocks. In fact, stocks outside China are at their tightest in nine years.

One report has indicated that world stocks, including China, are at a record high with a stock-to-use ratio of 34.6%, or the highest level for 30 years. However, dry weather in some key producing areas is starting to give cause for concern for the 2018 crop output. This has been responsible for US winter plantings to be the slowest since 1996, with only 27% of the key Kansas crop drilled compared to the 58% five-year average.

Crop establishment is also said to be poor in Russia, Ukraine and Kazakhstan as they head into winter. There is a growing reliance on Russian wheat supplies and they are expected to be the world’s top wheat exporter in 2017-18. A concern is that Russia has a record of poor harvests due to extreme heat (as in 2010 and 2012) and with the world relying on Russia’s output, any impact would be much bigger now given its role in supplying wheat to the world.

Australia’s wheat harvest production total has been reduced due to ongoing dry crop conditions, which is also the case in Brazil. Meanwhile, excess rain in the US plains and parts of Argentina are giving cause for concern.

UK wheat futures have dropped as the pace of farm selling picked up for both feed and quality wheat. However, ex-farm prices have held up with bread milling wheat up 70p at £152.70, feed wheat up £1 at £140.10, feed barley up £1.50 to £121.90 and oilseed rape delivered Erith down 50p at £325 per tonne.