Following the Highland show – where the weather was perfect for visitors but perhaps getting too hot for livestock – the sunshine was ideal to bring on crops, especially winter barley which is getting nearer to harvest time.

As ever, the weather elsewhere in the world is playing a part in yield predictions and crop prices as the crops progress towards harvest.

Australia has had some very dry weather but recently got some rain just in time for the development of the young crops in New South Wales and Queensland, which last year accounted for 30% of the country’s wheat area, 23% of barley and 24% of rapeseed.

However, the dry weather had already resulted in a 10% fall in the area planted to rapeseed across Australia and a 2% fall for wheat, but a 10% rise in barley.

Closer to home, the EU27 winter cropping and maize yields have been revised down due to the impact of poor winter and spring weather – by 3% for winter barley, 7.3% for oilseed rape, 6.4% for maize and 1.1% for soft wheat.

In France, where the winter barley harvest has just started, all eyes will be on the first yield and quality results. These usually set a benchmark for future cereal prices and wet and warm weather there had raised disease pressure for winter-sown crops.

In Germany, hot conditions and sparse rainfall hit crops at the flowering and grain-fill stages, which is also mirrored in other parts of Europe.

However, in Spain rainfall has benefitted its winter crops and yields have been revised higher as a result. This has affected new crop Scottish barley prices, with export prices dropping as a result of there being no buyers from Spain and Portugal grabbing supplies for next year – at least at this stage.

Following drought in Southern Russia and excessive rain and cold in the north, Russian output is expected to be 67.4m tonnes of wheat – or 17.6m tonnes less that last season’s record, but still its third largest tonnage produced.

Up to June 19, Russian grain exports stood at a record 51.8m tonnes for the year to date, compared to 36.8m tonnes last year and included 39.9m tonnes of wheat, 5.2m tonnes of barley and 5.1m tonnes of maize.

By comparison, the EU exported 19.3m tonnes of wheat compared to 23.6m tonnes the previous year plus it imported 16.6m tonnes of maize compared to 12.3m tonnes last year at this time.

The UK exported 410,000 tonnes of wheat for the same period compared to 1.37m tonnes last year, imported 1.39 mm tonnes of wheat and exported 970,000 tonnes of barley

North America has also been suffering from drought conditions but overall its crop ratings for wheat, barley, and maize are the best since 1991.

Drought followed by heavy rain is causing forecasters to predict a 20% yield loss in key Chinese wheat regions and this could be supportive to global prices.

UK winter and spring crops have had some rain and in the Borders last week we had around 20-25mm which was much needed. The ongoing warm weather could see harvest start earlier than normal despite that during the poor winter weather looked as though it would be later than normal.

With all these concerns put together, since December, 2017, the price of cereals has had month on month growth. The cereal price index, which reflects international prices for wheat, maize and rice, has risen 10% between December, 2017 and May, 2018, and stands at its highest position since January, 2015. Relative to the food price index, the cereals index has seen faster growth, with a rise of 17% over the 12 months from May, 2017, to May, 2018, compared to 2% for the general food price index. There have been declines in global vegetable oil, meat and sugar prices over the year.

The escalating China-US tariff situation is influencing markets and currently the proposed tariff measures which will affect 659 US products, is set to be implemented by China on July 6, including a 25% tariff on US soyabeans. This would come into effect at a time of year when historically, China has imported minimal volumes of US origin soya.

In response to the US’ latest tariffs, the EU is implementing retaliatory measures on US goods, worth €2.8bn. This follows the US decision to implement tariffs of 10% and 25% on aluminium and steel products, respectively.

EU measures will apply to a variety of goods, including clothing, whisky and various agricultural products and the inclusion of a 25% tariff increase on imports of maize from US origins.

Indications that the US would apply tariffs to $200bn worth of Chinese imported products triggered a notable wheat futures sell off. At their low last week, the Chicago Board of Trade wheat futures had lost almost 8% of their value on the previous week before making a small recovery and the UK Liffe wheat futures saw a similar reaction as well.

China sold a further 1.4m tonnes of maize from its central stores last week taking total sales over the past 10 weeks to a staggering total of 47m tonnes.

The July, 2018, Liffe feed wheat futures dropped by £3.50 to £146.60 last week and by £5.35 the previous week and for November, 2018, was up £1.25 to £159.00 and for November, 2019, up £1.70 to £158.30.