MANY FARMS have cut winter barley and are now waiting for oilseed rape or spring barley to ripen.

Winter barley yields appear to be satisfactory and malting samples have made the standard, so even with a lack of sunshine this gives hope for average or better wheat yields this harvest.

The weather is still variable with some nice sunny days but interspersed with some heavy showers of rain which causes problems for ongoing harvest operations.

With better yields than expected in Europe, even with recent hot dry weather this is keeping prices pegged back. France has completed around 90% of its wheat harvest and it looks like the previous estimate of 38.05m tonnes of wheat is now expected to be nearer to 40m tonnes - that would beat the previous record of 38.2m tonnes set in 1998. Russia is also expected to produce more wheat as will Ukraine.

The El Nino weather phenomenon in Australia is now established and is likely to strengthen due to the sea surface temperatures possibly climbing to the highest level seen in 19 years. El Nino remains a threat to Australian crops and rainfall in September and October will be crucial to yields and recent rainfall has increased wheat output from 22m tonnes to 24m tonnes.

The Liffe feed wheat futures for November, 2015, were up 10 pence on the week to £119.95 but UK ex farm prices for feed wheat were back £5.90 to £109.88 and feed barley was down £3.10 to £96.20. Bread milling wheat was back by £11.20 to £124.20.

The latest GB animal feed statistics revealed that the level of wheat incorporated in animal feed production was up 6% yer on year, and the use of barley was down 12.5% in comparison to last year. Wheat became a more popular ingredient due to its higher availability and lower prices in 2014/15.

Cereals usage data showed that 157,000 tonnes of barley was used by brewers, maltsters and distillers in June, 2015, which is marginally down on the year. Millers returned to using home grown milling wheat due to its greater availability after two years of high reliability on imported wheat.

The UK exported less than 2m tonnes of wheat in 2014/15 after exports fell sharply in June to just 55,000 tonnes. While it is not unheard of for exports to tail off at the end of the marketing season it does suggest that the UK was struggling to compete.

Consequently, UK wheat exports in 2014/15 totalled 1.92m tonnes which is below the full season forecast in May of 2.17m tonnes.

In contrast, June was another relatively strong month for barley exports. The June monthly total of 130,900 tonnes included 50,800 tonnes to Saudi Arabia and takes the season total to 1.49m tonnes which is ahead of the forecast 1.46m tonnes and the largest season for UK barley exports since 1999/2000.

Barley licences granted to export out of the EU are up by 80% compared with last year, largely driven by big volumes of French feed barley going to China which amounts to an extra 800,000 tonnes. The UK is not yet approved as a supplier to China, but it does help the EU supply and demand balance sheet to achieve its target, especially with recent big French and UK yields of barley.

This could be the year that English winter barley yields break the previous recorded level, due to new two and six- row high yielding varieties, such as Talisman and Venture, that have performed above average.

In England, the wheat harvest is under way with yields better than expected but struggling with a wheat market that lacks demand.

The significant old crop carry over has left the UK market oversupplied and lacking in demand resulting in prices achievable below the cost of production and with export opportunities scarce it is a worrying situation.

However, with the fall in UK feed wheat futures since early July the carry from November, 2015, to November, 2016, contract is back above £10 and is creating an opportunity to carry the 2015 crop into the 2016 season.

There are concerns for the French maize crop where their 'good' or 'very good' proportion of the total area fell for the seventh consecutive week due to hot weather.

Crop ratings put at 85% good to excellent in mid June slipped to 58% at the end of July and the French maize output is likely to fall from18m tonnes to 14m tonnes. Lack of rain and continued heat in Romania and Hungary could reduce the EU crop to below 65m tonnes from 77.8m tonnes last year.

One piece of good news is that China is importing a record 9.5m tonnes of soyabeans in July from Brazil and Argentina on the back of lower prices and represents an increase of 17% from June and 27% increase from 2014.

Soya crop conditions have improved in the US Mid-west but soils are now becoming too dry after the fields were so wet in June and the plants failed to put down deep roots.

This helped raise oilseed values but the price delivered Erith remains unchanged at £268.50 from last week.

The 2015 potato crop GB weekly average price for free-buy and contract trade for the week ending August 7 increased by £1.88 to £187.02 which compares to £143.56 at this time last year. The GB weekly free-buy trade decreased by £2.39 to £201 compared to £98.93 last year at this time. The proportion of free-buy trade increased from last week but contract accounted for the majority.

In Scotland most supplies moved on contract with only a few loads of free-buy Maris Peer at £260 per tonne graded 45mm down and the first loads of loose skinned Maris Piper from East Lothian at £220 per tonne. As well as lifting of Maris Piper in East Lothian for packing, Marfona is expected to be loaded from Fife this coming week with yields expected to be 40-50 tonnes/ha.