THIS recent spell of decent weather across much of Scotland has allowed potato planting to progress almost non-stop and growing cereal crops have moved on well.

However – dare I say it – some growers are now looking for a night’s rain to help growth to progress!

While weather conditions around the world recently have caused minor problems with various crops, the last four years have not seen any disastrous global harvests. This has allowed surplus wheat production to continue – but what's the outlook for this year?.

First, a quick history lesson. Looking back to from 1960, global wheat production has increased by 225% to reach a projected 758m tonnes in 2017-18. Despite this, the global area harvested has remained fairly consistent, with a 5% decline since the 1980s.

So, that means average global yields have more than doubled since 1960 and are the main driver behind the growing production tonnage.

Since around 2010, the top six wheat exporters have been Australia, Canada, the EU, Russia, Ukraine and the US. From 2010-2018, these countries are projected to account for 86% of all wheat exports – Russia is expected to be the largest wheat exporter in 2018 with 36m tonnes, overtaking both the EU and the US.

The Black Sea exporters of Ukraine and Russia have increased their harvested area and yield at a faster pace than the more established wheat exporters.

A cumulative change of 22% in area and 53% in yield since 2010 has been produced in Russia and Ukraine. That's compared with -5% and +7%, respectively, for the same period in the established exporters.

The US wheat harvested area in 2017 was the lowest since 1890 and the UDSA has estimated wheat plantings in 2018 will be the lowest since 1909. With recent weather concerns over hot and dry weather in the US Plains, this highlights how production has become more vulnerable.

Although world wheat production and stocks are currently in a healthy state, a risk is emerging. The increasing demand for wheat is driving pressure for continued production increases. Although technological advancements continue to promote yield increase, the reliance on yield performance is greater than ever because of a lack of growth in the wheat area globally over the past 30 years.

The top wheat exporters are now exposed to a greater reliance on yield and are holding a lower proportion of global stocks, at the same time the requirements of importers are increasing.

In 2017-18, Indonesia is forecast to become the world’s top wheat importer, taking over from Egypt – which has held this position since 2006-07.

Currently, UK wheat prices are above world levels and have been since 2016. May, 2018, old crop Liffee wheat futures were up last week by £1.50 to £146.90 and November, 2018, new crop was down £1.80 to £152.95.

Part of the reason for UK prices rising relative to global levels is the sharp fall in the value of the pound following the results of the EU referendum in June, 2016.

Bread milling wheat ex-farm this past week has risen by £4.50 to £162.50, feed wheat is up £4.30 to £152 and feed barley is down £1.60 to £141.40.

One of the reasons for the decline in the UK wheat planted area over the past 10 years has been the effort to control black-grass in England, where the wheat area fell by 283,000 ha, or 15% between 2008 and 2017 mainly because of that pernicious weed.

Wheat accounts for 65% of UK total grain output and with a lower available tonnage, this pushed up grain prices relative to global levels.

Going forward to 2018-19, world wheat production is expected to fall as UK wheat production is forecast down 2%, weather issues in Russia could see a 17m-tonne fall in production from last year, which may be offset by small gains in the US, Canada and Australia. However, global production will be down by 10m tonnes to 747.76m tonnes.

World consumption will be conversely be up 10m tonnes and year end stocks will be down 6m tonnes to 264.33m tonnes. Stocks could be tighter, in reality, as China holds 52% of these stocks. That means it will not likely be available for export so this reduction in stocks will be the first since 2012-13.

Global maize production is expected to rise by 20m tonnes to 1056m tonnes, but consumption will increase by 22m tonnes to a record 1091.77m tonnes. This could result in a fall in world stocks of 35m tonnes down to 159.15m tonnes, the lowest they have been since 2012-13 when annual consumption was 200m tonnes less. Global soyabean stocks are also projected to fall next year, falling from 92.2m tonnes to 86.7m tonnes and this is due in part to reduced Argentinean production weather issues.

A weaker sterling value has recently helped old crop prices and oilseed rape delivered Erith was up £2 to £300 per tonne.

One thing that will underpin oilseed production is that Brent crude oil futures have continued to rise, closing recently at $77.21 per barrel – the highest price since November, 2014. This is due, at least in part, to US President Donald Trump imposing sanctions on Iran, which produces around 4% of the world’s oil supplies. Sanctions could severely limit its ability to export into global markets and this could see oil prices increase even further.