Crops here in the Borders have had some heavy rain over the past few weeks and not a lot of hot sunny days. They are generally looking good, but it is difficult to tell how yields will be following the early dry spell when moisture was required to get the crops started.
Harvest is under way in the south of England and early indications are that quality does appear better than last season. Specific weights are lower but this would be expected following the dry spring and recent hot conditions in the south. Yields are ranging from 7 to 9.5 t/ha, which is satisfactory, and early malting barley indications are of reasonable quality but generally lower screenings than last year.
A large barley surplus in the UK is expected despite modest yield expectations, even with localised rain damage which flattened some crops last week. As a result of an expected large tonnage, prices for the 2017 new crop have come under pressure and will have a knock-on effect into 2018’s harvest where prices have also declined. Prices today however, are still £10.00 per tonne higher than a month ago.
Feed barley ex-farm was up £2.70 on the week to £115.70, feed wheat was up £2.40 to £144.90 and bread milling wheat was up £5.80 to £152.50.
The liffe feed wheat futures for November 2017 new crop wheat was up £1.60 to £151.00 and by Tuesday was up to £154.00 per tonne due to crop concerns in the US and weaker pound compared to the Euro, which helped to support the markets.  
Looking elsewhere in the world, conditions for Australian crops have deteriorated so much that there is growing talk that their wheat harvest may fall below 20M tonnes, which would be a fall of more than 40% from last year’s record high and the lowest production total since 2007.
The Australian canola crop is forecast down 20% at 3.32M tonnes from 2016-17 high levels but above the 2015 total of 2.94m tonnes and their barley crop at 8.11M tonnes would be down 39% from 2016-17 and 14% below the five-year average.
Australia typically accounts for 11% of global wheat exports, 20% of global rapeseed exports and 23% of global barley exports.
Crop ratings for the US spring wheat crop dropped to 34% for the good and excellent categories, and the outlook is for more hot and dry weather over the next 10 days, which is likely to cause conditions to deteriorate further. Hot, dry conditions are continuing to affect spring wheat crops in the Northern US plains and in southern parts of the Canadian Prairies.     
A recent report lowered the estimate for world wheat production for 2017-18 by 3.3M tonnes, but pointed to a record high opening stock position at 255.8M tonnes, which includes a rise of 8.7 M tonnes over the figure of 12 months ago.
Current forecasts suggest EU winter barley output is expected to fall this season to around 58M tonnes, which would be 3% lower year-on-year.
In Spain, winter barley production has been hit by frost and drought over the past six months and output could be as low as 555,000 tonnes, requiring the country to rely on even more imports this season. The Spanish winter barley crop has been declining, with production falling from 2.7M tonnes in 2007 to 808,000 tonnes in 2016. Their spring barley crop also looks to be down to around 3.4 M tonnes lower year-on-year to around 5M tonnes. The ability of the UK to supply barley into Spain will depend heavily on the size of the UK crop and competitiveness on the export market and in 2015-16, the UK exported more than 550,000 tonnes of barley to Spain.  
The French winter barley harvest is looking more positive and at 3rd July 60% of their winter barley crop had been cut and this is well ahead of last year’s pace when 13% had been cut at that time. The condition of the crop is looking favourable with 62% rated good to excellent compared to 53% last year, however, there are concerns for the spring crop with reports that the recent hot spell may have done some damage.
The winter barley harvest has started in Germany, which is the EU’s second largest producer, and rain over the past week has stopped harvest operations and this could affect the quality of the crop.
The UK is expected to have a wheat crop in excess of 15M tonnes, but this would still leave us with an exportable surplus of less than 1M tonnes, which would be the smallest surplus for four years. The UK continues on course to import more wheat than it exports in the 2016-17 season and is only the fourth time since 1995-96. The strength of exports earlier in the season increased domestic demand and a smaller harvest in 2016 have all been the driving force behind UK import requirements.
Oilseed rape prices were up £7 on the week and have continued to rise and at the end of last week OSR delivered Erith was up £6 to £325.50. Concerns about less than ideal US weather forecasts were the main driver for Chicago soybean futures rising by more than 6% last week and Paris rapeseed futures also lifted. French rapeseed production has been forecast at 4.67M tonnes which is 1.5% lower than the 2016 weather affected crop and 8% lower than the 5yr averag