WITH 30mm or just more than one inch of rain in the past seven weeks, and temperatures last weekend creeping up towards 25°C in the Borders and no rain forecast for the immediate future, then there are concerns for yield reduction in cereal crops unless we get some rain in the not too distant future.

Potatoes appear to be finding some moisture at least as they emerge and are being helped by warmer soils.

But there is one bonus. The LIFFE wheat prices have picked up, both due to the dry weather concerns and because of weaker sterling versus the US dollar. The euro also set a four year low against the dollar at €1 to $1.22.

Currently, £1 equates to $1.43 and €1.17, which makes €1 worth 85.5p. This helps make EU and UK exports more competitive in the world market place. The LIFFE feed wheat futures for May, 2010, are up £2.25 on the week to £106.25 and for November, 2010, up £4.80 to £109.90.

The strong export market for wheat has seen the total rise to 1.73m tonnes, which accounts for 78.5% of Defra’s season total estimate of 2.20m tonnes.

This has had the effect of tightening the supply and demand balance of wheat in the UK resulting in higher futures and actual ex farm prices.

The dry weather concerns are not only evident here in the UK, but in France and Western Australia where it is expected to affect yields there, as they are in the middle of the key wheat planting period. In Europe soft wheat exports now total 15.7m tonnes compared to 19.7m tonnes at this time last year.

Global wheat stocks are forecast to rise yet again to over 200m tonnes as production reaches 660m tonnes with demand at 654m tonnes.

Feed wheat ex farm Scotland is quoted at £100.40, and in England feed wheat ex farm is up £2.50 on the week.

The old crop barley market is very quiet at present, with very little domestic or export demand. However, Scotland will have very little feed barley carryover as the long winter used up larger quantities of feed barley than usual. That, along with exports and 72,000 tonnes of Scottish barley going into intervention stores, has reduced what might have been a large surplus.

In total, 175,859 tonnes of UK barley have been offered into intervention, but with 25,330 tonnes being rejected this has left nett barley offers of 150,529 tonnes of UK barley going into store.

The tonnage of Scottish malting barley on farm and in store is, at present, an unknown quantity and, with the European barley production down by 5.5m tonnes, this has seen new crop prices of both feed and malt barley firm up this week – again due to dry weather and currency changes.

With barley at a £10 discount to wheat, it will be difficult to get any export trade, but if the discount was down to £5 then the UK barley would be competitive with other European sources. UK barley exports from July, 2009, to March, 2010, total 818,000, compared to 662,000 in 2008/09.

Feed barley ex farm Scotland is quoted at £81.50 and the UK average price is down £1.20 to £82.

One bit of good news is that China needs to import around 2m tonnes of barley as in 2009/10, less than one third of their crop grown made malting quality. Its barley tonnage for this coming year looks to be down by 30-50% due to lower planted area and so will be looking to import another 2m tonnes this coming year.

Oilseed rape prices again have been volatile this past week as currency and crude oil prices moved up and down. Crude oil has dropped by $17 per barrel from a high of $86 at the end of April to $69 at present. The MATIF rapeseed futures for November, 2010, are down £2 on the week to £260 and ex-farm Scotland delivered prices remain unchanged at £269.

Nearer to home, the cold weather during flowering on the oilseed rape has given some cause for concern and yields may be affected both here in the UK and Europe.

Potato planting is all but finished now except for some seed crops in the North of Scotland. The weekly average price has risen sharply by £10.88 to £127 and compares to £128.87 last year at this time. The free buy price rose even further by £20.27 to £101.40, which is still £16 down on last year.

Ware imports, at 77,250 tonnes, are well down on last year’s total of 103,560 and new imports at 95,439 tonnes are 38,000 tonnes down on 2009.