At last the weather forecasts for this week are for drier and warmer weather following the month of March where the UK rainfall was 10% above the average years from 1981- 2010. Here in the Borders at Lochton, where John Aitchison provides the figures, March rainfall was 93.1mm and 202.2mm for the year to date.

If the forecasts are proved correct and they have been so far, this has allowed some field work to go ahead which has been evident by the sudden rush of big agricultural machines moving around the countryside.

The annual lawn cutting exercise has started again and winter sown crops are beginning to green up which means that soil temperatures are starting to rise and salad potato planting has started this week again on very light soils.

Due to the late spring and a lack of grass to turn out stock, old and new crop futures have firmed this past week especially in Northern regions of the UK due to consistent demand for ethanol production and animal feed for housed livestock.

UK Liffee old crop feed wheat futures for May 2018 were up £1.40 to £146.50 and November new crop was up 35p to £146.45 per tonne and these figures are above the cost of production which is encouraging, provided the yields are not affected by late spring sowing and the long drawn out wet and cold winter.

Vivergo has announced the re-opening of its bioethanol plant after a four-month shut down for maintenance to the plant and also due to low European bioethanol prices and poor production margins.

There has been some maize used instead of wheat in the ethanol and distilling sectors but not enough to ease the squeeze on wheat supplies. With winter crops still sitting in wet cold fields, in many cases making very little progress and spring crops just beginning to be sown and very little grass to eat, this all provides a boost to wheat demand but hopefully this will all change soon if the weather picks up.

Last week feed wheat delivered into Yorkshire was worth £160 per tonne which was £13.35 over the nearby futures contract and the delivered premium is now the highest in recent years. The premium has risen £4.85 in the last eight weeks from £8.50 per tonne in mid- January and this is in part due to the Vivergo plant restarting production and also reflects the tight overall UK wheat supply and demand.

The strength in delivered premiums has pushed wheat prices in the north close to import parity and we could see feed wheat imports into the north to satisfy domestic feed grain demand for both animal and industrial use especially when the Vivergo plant has a potential 1.1 million tonnes of annual demand for wheat.

Poor European bioethanol prices and production margins has seen two biodiesel plants either cut output by 50% or suspend production and not helped by competition from EU imports of biodiesel from Argentina and Indonesia.

Bread milling wheat ex-farm was down £2.40 last week to £149.30, feed wheat was up 10p to £147.80 and feed barley was up £1.90 to £142.10. Oilseed rape delivered Erith was down £3 to £297.50

France has lowered its forecast for soft wheat exports to non-EU countries to 8.3m tonnes which would be the lowest total exported since 2007-08 excluding 2016-17 when there was a particularly poor French wheat crop due to prolonged wet weaher.

Overall EU soft wheat exports totalled 15.2m tonnes as at April 11, down 24% year-on-year and the lowest since 2011-12. The current EU commission forecast for 2017-18 soft wheat exports is 23m tonnes and given the current export rate it is unlikely that figure will be achieved so stocks are likely to be higher than initially envisaged.

US wheat futures have fallen this past week following better forecasts for their drought-stricken Plains which is good news for their winter crops but too early to say if will help their crop ratings which currently sit at a 20-year low.

UK feed barley usage was up in February with usage 11% higher year-on-year. In addition, barley usage by poultry units and retail compounders was 25% higher to date compared to the same period last season. Feed barley prices have held up well with the total annual export target expected to be be reached by the end of this month.

Brent crude oil prices are now higher than they were as at December 1, 2014, and this could lead to increased production costs, with farm input costs potentially increasing and impacting on gross margins. However, a rise in crude oil prices could help support palm, soya and rapeseed oil prices in the future as prices are now at a three year high of $72.06 US per barrel due to deepening Western- Russian tensions.

This past week has seen ongoing trade disputes between China and the US escalate with China imposing a potential additional tariff of 25% on US soybeans as well as 30 other US agricultural products.

The production of total EU rapeseed, soybeans and sunflowerseed crops has reached a three year high of 22.2m tonnes which is an increase of 9% on the 2016-17 production. EU rapeseed production is expected to increase by 2% in 2018-19 and in the UK rapeseed production is estimated up 1%, whilst planting has been projected to see an 11% rise.

The Argentinean 2017-18 soybean crop is now estimated at 40m tonnes which is down 14.9% from its previous estimate and the smallest crop since 2008-09. By September 2018, global palm oil production is expected to hit 70.5m tonnes for the season which would be 3.8% up from last year’s total and lower global ending stocks of 90.8m tonnes of soybeans, coupled with lower US soybean stocks of 14.9m tonnes will help to support oilseed prices.