Weather

What a difference a few weeks of drier and warmer weather makes to crops in the ground and to allow work to proceed in the fields.

Following the heavy rainfall in April where 90mm or 3.5 inches of rain fell at Lochton near Coldstream, which was a record for the month of April going back to 1903 when their rainfall records began.

Their total rainfall for the year up to the end of April amounted to 9.86 inches and there has been a lot more in other areas of the country which has resulted in a lot of damage being done to winter sown crops.

Last month was the hottest record on record according to Copernicus who provides all the figures and weather data that we read about on a regular basis as we see weather related records now being broken on a regular basis.

Record levels of greenhouse gases in the atmosphere and the weather phenomenon known as El Nino pushed up air temperatures across the globe. Surface air temperature was 15.03°C-0.67°C above the 1991-2020 average for April and 0.14°C above the previous high set in 2016.

The global average temperature for the 12 months to April is the highest on record, 1.61°C above the 1850-1900 period used as the benchmark for pre-industrial levels. In Europe, the continent that is warming fastest on Earth, temperatures were 1.49°C above the 1990-2020 average for April. However, the temperatures in the UK have been labelled as average at 8.3°C by the Met Office, just 0.4°C above the 1991-2020 April norm.

Looking to the future coupled with rising sea surface temperature and increasing concentrations of greenhouse gases will keep pushing the global temperature towards new records.

General update

Fieldwork has been completed for most cereal crops, but potato planting is still very much on the go and it is only now that soil temperature are rising which has seen recently sown crops row up nicely and they are generally all looking well with fertiliser and spray applications up to date.

As the UK now manages to catch up with the backlog of work this is not the case in other parts of the world.

This has seen a rapid rise in wheat prices as prolonged dry weather in Southern Russia and eastern Ukraine has caused production shortages in the wheat producing regions where temperatures have also dropped, and hard frosts forecasted.

This could see wheat production in the Ukraine and wheat exports falling from 17.5mt in 2023 down to 14mt in 2024.Russia is also forecasting a drop in wheat production down to below 90mt.

EU wheat production estimates have been revised downwards by up to 6mt compared to last year down to around 120mt. There are also concerns for the US winter wheat crops due to dry conditions in the western US winter wheat states but planting of their maize crop is being delayed due to heavy rain across much of the corn belt and US farmers are now looking to plant just over 90m acres compared to their 94.6m acres last year.

49% of the US winter wheat is rated as good to excellent which last year at this time was at 28% so there has been an improvement year-on-year.

Wheat

Recently, due to the weather issues just mentioned in Russia and Ukraine, speculative fund short covering took wheat futures to their highest levels in 2024 and are still rising.

Currently May 2024 new crop feed wheat futures currently stand at £192/t which is up over £20/t from the end of March and November 2024 new crop wheat futures currently stand at £220/t which is up £26/t since the end of March which means the carry from May to November is over £27/t.

The severe Russian drought seen in 2010 may not be repeated to the same level again but concerns of threats to their wheat yield cannot be discounted so speculators could again cause price spikes if they react again as they have done recently.

Germany and Canada are key suppliers of milling wheat to the UK and the recent wet weather in Germany will see a 6% reduction in production and similarly France has also suffered from poor weather, again with a reduction in tonnage.

With these weather issues and a possible higher demand for imported milling wheat, this could see an increased milling wheat premium in the months ahead.

Animal feed production

For the season to date, i.e. from last July -March, total GB animal feed production has totalled 10.20mt, which is 1.5% up on the year but the second lowest tonnage since 2015-16.

Cattle and poultry feeding have increased while sheep and pigs have seen a decline in feed tonnage. Despite a slight increase in animal feed production, usage of wheat, barley maize and oats by feed compounders is down by 1% on the year.

Oats have seen the greatest decline in usage, down by 32%, wheat is down by 1%, maize down by 9.5% while barley is up by 3%.

Cereal Stocks

The AHDB recently announced their estimates of cereal stocks held by merchants, ports, and co-ops in the UK at the end of February.

Stocks of home-grown wheat were up 9% on the year, while stocks of imported wheat were down 2% on the year. Home grown barley and oat stocks were down 15% and 34% respectively while maize stocks were down 17% on the year as at the end of February.

UK Cost of Production

In recent months, we have often mentioned that the UK has been uncompetitive when trying to export wheat as the price of wheat was too high. The AHDB have been doing some research into the cost of production of wheat by various countries and compared to Canada, Germany, Denmark, Spain, France, Ukraine and the US the UK comes out as having the second highest cost after Denmark and the lowest cost being achieved by the US.

However, despite the high cost of production the UK produces on average the second highest net margin behind France and is due to the higher yields achieved over the other countries.

Barley

The rise in wheat futures has helped both old and new crop barley prices but by not as much as seen in wheat prices. This has resulted in the barley price discount to wheat increasing from around £20/t to £25/t.

Currently as is the case with feed wheat, feed barley is not export price competitive and with a large percentage of the UK’s spring barley crop being spring sown, for both potential malting and feed it is too early at this stage how prices will be affected with the extra ha’s planted this spring.

There are also concerns for the quality of the late sown malting barley in the UK as well as France and Scandinavia as the carryover tonnage of malting barley throughout Europe are very low.

Pulses

The UK’s old crop bean supply has tightened significantly over the past month which has seen prices rise by over £20/t. Increased demand from buyers unable to source alternative protein sources has supported the price increase especially for July and August. There is little demand for export or domestic use at present for new crop beans and ex-farm beans are trading at around £45 to £50 over November wheat futures but if there is a bigger bean crop than forecast then prices may well ease.

Oilseed Rape

Rapeseed prices have increased recently as concerns increase for production in Europe and Russia due to weather issues. Rapeseed delivered to Erith for May delivery is quoted at £387/t which is £8 up on the week and for November, also up £8 at £405/t.

In AHDB’s latest crop condition and development report, only 47% of the winter oilseed rape crop was rated as in good or excellent condition, which is an improvement from late March when the figure was 31%, but still well below the 66% at the end of April 2023.

The EU rapeseed crop is now put at 18.1mt which would be 9% down on the year but Canadian crop stocks as at the end of March are put at 8.3mt which would be up from the March estimate of 7mt.