This year’s harvest is proving to be a long drawn out affair, with barley crops that were sown late in the spring are proving slow to ripen.

Winter wheat crops are now just about fit to combine and need a good spell of weather to get the job done. Post-harvest, fields have had a quick turn round and a lot of winter crops have been sown into good seedbeds.

The barley market has seen a modest decline in prices as futures dropped lower as sterling increased against the euro. Since August 25 sterling has been steadily strengthening against the euro and is now currently sitting at around €1.19 as at September 2.

This rise against the euro has come as UK manufacturing activity in August recorded its largest month on month increase in 25 years. This was on the back of more export demand for UK products driven by weaker sterling.

Going forward, where sterling goes will all depend on how the UK economy performs over the next few months and years, following Brexit.

Feed barley is now only worth £9-£12 less than wheat, compared to £12-£15 per tonne some two weeks ago and the UK will have to become more competitive on the export market.

Cereal growers are about to have a new export outlet, as the Chinese market is now open to exports of barley. This year, it is looking to import 7m tonnes of barley and the UK could have as much as 150,000 tonnes, worth £20m, available.

All the necessary permissions are now in place to give the UK access to mainland China, which is a massive and growing market. Demand for barley in China has been increasing and being fuelled by a large and fast-growing beer market while domestic production has, at the same time, been in decline.

Wheat market prices continue to fall as other large wheat growing countries such as Russia and the US offload wheat onto the world market place. So far this season, the US which is the fifth largest wheat producer with 2016/17 output forecast 13% higher than the previous season at 63m tonnes, will have export sales of wheat increased from 10.1m tonnes to 11.8m tonnes. Also, Russia is set to fix its wheat export duty rate at zero for the remainder of the 2016/17 season following a bumper 2016 cereal crop.

This cause the Liffe feed wheat futures for November, 2016, to drop £3 this past week to £122.75 and, earlier this week, dropped even further and for November, 2017, down £3.35 to £129.70 and for November, 2018, down £2 to £135.75 per tonne.

The knock-on was that UK ex-farm bread milling wheat fell by £4.40 to £128.70 and feed quality wheat dropped by £4.60 to £117.10. Feed barley was down £2.60 to £102.30 and oilseed rape delivered Erith was down £3.50 to £321.50.

The gap between November, 2016, feed wheat futures and both new crop US maize contracts, in sterling terms, has widened in recent weeks, driven mainly by the feed base, resulting in maize prices dropping further.

Chicago maize futures recently closed at £90.42 which was a new 10-year low and a £7 per tonne drop in one week. The drop in maize means that it could be a more attractive feed ingredient compared to wheat. This could have implications for UK feed wheat demand if it has to compete against cheap imported maize this season.

The wheat harvest is still not complete in many northern European countries. Quality and yield information continues to be mixed and down on last year. UK quality remains excellent and at an all-time high but yields are more variable and are in line with the five-year average.

The Australian wheat harvest is looking to be up at around 30m tonnes which is a big increase over last year’s tonnage of 24.2m tonnes and would exceed their largest ever crop of 29.6m tonnes in 2011/12.

The European Commission has cut its forecast for total usable wheat production in the EU this season to 142m tonnes, well below the 160m tonnes achieved last year. It forecast 2016/17 soft wheat exports at a four-year low of 25m tonnes, compared to the 34.2m tonnes exported last season.

This mainly due to particularly heavy rain causing quality and yield issues in France, which is the EU bloc’s largest grower.

The commission also cut the EU maize crop to 65.5m tonnes but that's still better than last year’s total maize crop of 58m tonnes, when crops in many countries were affected by late season drought.

The US maize crop is forecast at 374m tonnes, compared to 345m tonnes last year and Argentinean maize exports in August set a new record for the month at an impressive 4m tonnes.

China, the world’s top soyabean consumer, plans to increase massively its domestic oilseed production over the next four years. The plan is to grow soya production to 18.9m tonnes by 2020, up 56% from 2014 levels and to increase rapeseed production by 10% over the same period.

Good weather across parts of the US has helped its soya crop to reach its highest rating since 1989 and looks set for another record year of production.

This will have a knock-on effect on prices and if the US crop condition continues to improve in the manner that it has been recently then the recent downward market trend could continue, pulling EU rapeseed prices down further.