Ploughed fields are starting to dry out, with little rain during the past week or two – at least in my part of the Borders –and thoughts are turning to spring sowing.

However, if the forecast was correct as we went to press, some large falls of snow throughout Scotland at the end of the week might have tempered some plans.

Temperatures might have been higher than normal. but it is early days yet to commit large areas of land to spring sowing.

But the heat is definitely not being felt in the trading markets. The UK December wheat exports, at 93,425 tonnes, were the lowest in December since 2013-14 – 45% down on November and 63% less year-on-year. This is due to the pound recovering in November and surging prices and the stronger pound have left UK dollar-denominated wheat prices expensive against other export origins.

That said, UK wheat prices at the start of December stood at £138 per tonne which was up 19% year-on-year.

To date, the world wheat balance sheet is leaning towards a heavy stock carry to the end of this season in the US and Russia and, apart from UK and French balance sheets feeling somewhat tight, the expected trend in less than six months is for high production figures to weaken wheat prices.

The rise in use of wheat, in both animal feed and milling was taking advantage of fairly cheap supplies of UK wheat and in December 7.7% more wheat was used to produce animal feed, due mostly for use in poultry production.

Milling wheat use was also up due to the increased use of biofuel usage when Ensus re-opened its plant which is one of the largest in Europe.

Wheat used by the GB milling industry from July to December totalled 3.65m tonnes, compared to 3.3m tonnes – that's 10% higher than for the same period last season and the highest amount of wheat milled at this point on records going back to 1997.

Human and industrial usage of wheat is forecast to rise by 7% on the year to 7.9m tonnes, up from 7.4m tonnes and that assumes that bioethanol usage will remain at its current pace.

Average ex-farm spot milling premiums in the UK are around £3-£5 and there has been less than £10 per tonne premium for full specification bread wheat over feed wheat since October. This small premium over feed is much more to do with strong feed wheat prices than the milling markets themselves. The UK now has some of the most expensive feed wheat in the world.

As part of the tighter UK wheat supply and demand picture, there has been continued strong demand for feed wheat for both bioethanol and animal feed. Alongside a strong export pace at the start of the season, this is now leading to higher UK feed grain import requirements.

For instance, bread wheat ex-farm is worth around £138 per tonne compared to feed wheat at £142. May, 2017, old crop Liffe feed wheat futures stand at £148.75, up 30p on the week, which is the highest closing price for almost a month and is £6 per tonne higher than the contract average and £2 per tonne higher than the post -planting average. November, 2017, new crop futures are up 75p to £138.45 and for the same month in 2018 they are up 15p to £141.75.

In December, the UK imported the highest monthly volume of wheat since September, 2015. At 174,000 tonnes, this is 41% higher than in November and 12% higher than December, 2015.

During the first five months of last season, from July to November, 2015, the UK was a nett importer of wheat. From December on the position changed as a heavy surplus and weakening sterling improved UK competitiveness, leading to strong exports in the second part of 2015-16.

This season, things have changed, despite heavy carryover stocks, reduced output and a strong demand for wheat from the poultry and bioethanol sectors has led to tighter supplies and a greater reliance on imported feed grains, such as wheat and maize.

This change in dynamics has contributed to the UK shifting positions from being amongst the most competitive wheat in the world, to amongst the most expensive.

Export values for UK feed barley are now well behind domestic prices which show feed barley £20-£25 below malting barley at around £121 per tonne.

Good conditions in France have seen around 8% of the expected spring barley planted to date, compared to 5% at this time last year. This has also caused a reduction in new crop export malting values.

Oilseed rape delivered to the crushers at Erith is up £1 to £365.50 due to a weaker sterling and lower on-farm stocks. Recently, a boat with Australian canola (OSR) arrived in Liverpool and the last time a large amount of rapeseed was imported from Australia was in 2002. Australia produced 4.1m tonnes from their recent harvest and this is 41% up year-on-year and slightly higher than the previous record in 2012-13.

With nearly three-quarters of its canola exported this larger crop is likely to provide greater volumes to world markets and with tight supplies of rapeseed globally we could see more shipments from Australia in the future.