WRITING THIS in the third week of March, snow is falling outside following heavy rainfall earlier in the week and temperatures have dropped once again.

Gale force winds before that were helping the land to dry and some spring sowing has been done on the lighter land but the recent weather is only going to delay spring work even further.

Weather has also been causing some price volatility, especially in the US where previously dry conditions across the US plains over the past two months has given cause for concern for their emerging wheat crops. Some wildfires across central and Southern high plains last week have severely hit pockets of grain growing land.

So, May, 2017, Chicago wheat stabilised as a reaction to the recent adverse weather where limited rainfall and warm temperatures saw soil moistures fall rapidly – 74% of Oklahoma and 39% of Kansas (the top wheat-producing states) have been in a drought condition. In more eastern US areas, frost has been the problem and damaged winter wheat crops emerging from dormancy.

Temperature will also be an issue when the soil warms up to allow seed germination, but now farmers are concerned about getting onto the land as rain is expected in the US, which will delay their planting programme.

Rain is also expected in the next week or so in the US southern plains and Chicago wheat futures reacted again to that by dropping to their lowest level in nearly two months, pulling other cereal prices lower too. The lower prices have come despite a series of good export successes for the US, even though the current pace is still behind the level required to meet the USDA forecast for 2016-17.

The planting forecast for US wheat is now put at 45.9m acres which would be the smallest acreage since the start of USDA’s current wheat planting data going back to 1919.

Forecasts of rain in Australia are expected to relieve soil moisture concerns ahead of crop planting taking place at the same time as Australian wheat exports are at a record level following their 35m tonne harvest.

India will be one of the first global producers to make a start on harvesting the 2017-18 wheat crop, with forecasts suggesting a record high of up to 96.6m tonnes. In the last two year’s, production has been around 86m tonnes due to bad weather reducing total output. On average India accounts for around 13% of the world’s wheat production and with recent lower production Australia, in particular, had been exporting to there.

France has had some dry weather concerns but some rain is expected soon and will be followed again by drier conditions especially in their northern areas.

Argentina is expected to have a large wheat crop and, with Australia’s prospects good as well, global wheat production has been forecast to increase by 2.9m tonnes to 751.1m tonnes.

Egypt – the world’s top wheat importing country – is continuing to buy and last week bought 420,000 tonnes of milling wheat from France, Russia and Ukraine. In less than a month, it has bought 1.68m tonnes.

Two other reasons for price volatility are currency and politics – currency movement was one of the factors that caused wheat prices to be slightly lower week-on-week. The US dollar fell to a five-week low against the euro, making US grain more competitive on the world market.

On the politics front, Prime Minister, Theresa May, announced that the government will trigger Article 50 next week to officially start the Brexit process. This, combined with the release next week of the US spring planting figures and quarterly stocks results, could well cause some swings in the markets.

Global maize output this season is forecast to be a record high, with demand growing at a slower pace. This will lead to another year of surplus with end stocks around 220m tonnes. That said, maize prices have bounced back from a two-month low, supported by Chinese demand.

Accumulated maize exports for 2016-17 have reached 27.8m tonnes from the US and is the highest total for this period since 2007-08 and is more than 11m tonnes higher compared with the same time last year.

US farmers are set to plant a record area of soya at around 89m acres – a 6% increase on last year, reflecting the attractive price of soya compared to maize.

With Chinese demand for soya slowing, the outlook for the crop is not good and this is not being helped by a Brazilian crop of 111m tonnes, or 3m tonnes up on last year.

Falling crude oil prices continue to put pressure on oilseeds and soya as oil prices dropped by 9% last week to $50.92 per barrel due to large US stocks and Saudia Arabia increasing production back above 10m barrels. This has ramifications, too, for UK crops grown for biodiesel and digesters.