WHILE many fields in Scotland remain too wet for field work, a start had been made to spring sowing in the south of England, though rain has also now 'stopped play' there too.

There have been two main items of news this week for those itching to get on the land to ponder.

Egypt has stepped in to the market to buy 535,000 tonnes of milling wheat and rumours of policy changes to bioethanol in the US caused maize and soyabean prices to rise by 6% at one point.

This latter movement was based on ideas that the White House might allow an increase in the blending of ethanol into gasoline which would support demand for the maize-based biofuel.

The US government were thought to be shifting responsibility for blending bioethanol and biodiesel into fuel away from refiners. This was subsequently denied by the White House and price gains quickly evaporated.

Egypt's large purchase of wheat last week takes its total for the last month or two to around 1.3m tonnes and the amount bought since July 1 to 5.1m tonnes, of which 3.6m tonnes were sourced from Russia and 120,000 of the most recent 535,000 tonnes came from France – the first time Egypt has bought French wheat this season.

A smaller and poorer quality 2016 crop had limited French wheat exports this season, especially when competing against substantial Russian wheat supplies – and supplies from there have accounted for 70% of Egypt’s purchases so far, up from 42% in total last season.

The latest order matched the largest purchase since at least 2010 and Egypt’s total of 5.14m tonnes is well ahead of the 4.2m tonnes purchased in the whole of 2015-16.

As a result of the French wheat purchase, Paris wheat futures hit a seven-month high, reaching €174.50 per tonne for the first time for a spot contract since last July. France is forecast to export 4.9m tonnes outside the EU for 2016-17 and it appears to have a bit more wheat to offer than had been thought as traders, through blending, have got on top of the quality issues thrown up by last year’s harvest.

Defra’s latest UK supply and demand estimates released this past week suggest that UK wheat supplies at the end of the season may be tighter than originally envisaged. The wheat balance is now forecast at 3.08m tonnes, compared with 3.45m tonnes in December.

After taking into account operating stocks of 1.6m tonnes, this leaves an exportable surplus of 1.48, tonnes, compared to the 1.85m tonnes estimated in December.

The Liffe feed wheat prices for May, 2017, old crop were up £2.05 on the week to £148.5 and for November, 2017, new crop were also up £2.05 to £138.60.

A combination of factors are behind the jump in prices, dry weather in the US southern plains is causing concern for its winter wheat crop and strong demand for wheat from Egypt has also helped.

The premium 'carry' of UK November, 2017, wheat futures over the May, 2017, contract has switched. This season we are seeing a negative carry, with UK November, 2017, wheat futures now £9.45 per tonne below May, 2017, futures, which just goes to prove the volatility that can occur with new figures.

But. there remains a risk that in the last quarter of the 2016-17 season we could see a glut of final supplies of wheat coming onto the market. Th negative carry could essentially force supply to come onto the market, rather than stay in store into the following marketing year.

In the previous two seasons, we have seen a positive price carry, which incentivised the carry-over of stock from one season to another. That does not look to be the case this year.

World wheat production is forecast to fall for the first time in five years, despite a record harvest in Russia. World wheat output for 2017-18 is forecast at 744.5m tonnes – a drop of 13.5m tonnes from last year. Stocks are forecast to be around 239.6m tonnes and would still represent a record high.

The EU is expecting a 5.5m tonne increase to 150m tonnes due to a recovery in yield, especially in France which suffered from a very wet growing season in 2016.

North America will have its lowest planted wheat area in more than a century, though, on the other side of the coin, China’s wheat output is expected to rise by 400,000 tonnes to 120m tonnes.

Australia will have a 28m tonne harvest, which would be down 7.1m tonnes from last year’s record harvest and there are indications again – it's a 50% likelihood, reckon forecasters – that there will be an El Nino developing again this year.

Sea surface temperatures have increased and are now warmer than average for the first time since June, 2016 and warmer tropical ocean conditions could bring drier and warmer weather in Eastern and Southern Australia and South-East Asia. El Nino conditions have the potential to bring greater rainfall to South America and other parts of the US.

Palm oil production in Malaysia and Indonesia is still recovering from the El Nino weather event in 2015-16 and a possible return of El Nino would be a unique situation, as there is usually a three to four year break between EL Nino events.

So, as usual, weather patterns across the world will play a vital role in determining world grain and commodity prices.