Colder weather has come back again, along with fog and frost to remind us that even as the daylight gets longer we have not finished with winter.

Daffodils, snowdrops and other flowers are beginning to appear which is a good sign that it will not be too long before land work begins once again. However, some fields still have water lying but if we get some drouthy winds, then things can dry up quickly.

In the US, wet weather is not the problem, as the major wheat growing areas are suffering from serious drought conditions across the US plains. Their main wheat growing state of Kansas which has 7.8m ha of planted wheat is reported to be 67% drought affected and their wheat crop is rated as 14% good to excellent, compared to 44% last year at this time. Other states affected include Texas, Oklahoma, and Colorado, which mainly grow hard red wheat and the percentage of crops rated as ‘poor or very poor’ doubled from December to January to 44%. This compares to January, 2017, when only 20% of crops were rated as that.

As the US winter wheat area is estimated to be the smallest since 1909, higher yields will be needed to avoid a drop in output, so rain will be required soon if crops are to recover. They are currently at a relatively early growth stage, so there is time for them to make up lost ground, but the proportion of area classed as abnormally dry or in some form of drought is the highest at this stage of the year since 2013.

In 2013, continued drought conditions through the growing season led to many crops being abandoned and, as a result, production of hard red wheat was down 26% from the previous year.

In the latest International Grains Council report last month, a 2% fall in world wheat production was projected for 2018-19 down to 742 tonnes and given likely firm demand, the first drawdown of stocks is predicted since 2012-13.

In contrast, global total grain stocks are forecast to increase to 739m tonnes, up from 703m tonnes in 2016-17 and this would be an unprecedented fifth consecutive year of increase, with levels up 40% from the end of 2012-13 season.

Despite that, at one point last week US wheat futures gained more than £12 per tonne on the previous week due to the serious weather issues at present in the US wheat growing areas.

Back in the UK, the Liffe feed wheat futures for old crop May, 2018, were down 90p on the week to £137.60 and the closing price last week set a new 13-month low. November, 2018, new crop futures stood at £141.60, with little movement recently.

Rainfall over September to January across much of France was recorded at 200% of normal and with heavy rain forecast for the north of the country over the next two weeks and wet conditions prevailing in Germany as well, there are a few question marks in Europe too.

EU wheat exports have hit 12.2 m tonnes for the year to date, compared to 15 m tonnes last year at the same time. If this pace continues, it will see a total of around 21m tonnes of wheat exports from the EU, well below the USDA estimate of 27m tonnes. It will also increase season-end stocks, which will likely subdue prices.

Barley exports are in the same shape, at 2.9m tonnes while maize imports are up from 6.4m tonnes to 9.8m tonnes as at the same time last year.

Russian cereal exports are up from 37m tonnes in 2016-17 to 48m tonnes this season, which includes a huge total of 36.8m tonnes of wheat.

However, there has been more interest in UK barley exports to Spain, which has helped to keep export prices firmer, especially in the South of England.

In the northern UK regions, with ongoing cold winter weather, animal feed compounders are also using up barley stocks, which is keeping prices above those for export.

UK maltsters are still buying quality barley and prices are good for low-nitrogen tonnage that is still available and premiums for brewing varieties are as high now as they have been all season.

The weather in South America is highly variable, with heavy rain in Brazil delaying their oilseed rape harvest and hot, dry weather in Argentina is getting progressively hotter and is giving problems with predictions for their total oilseed harvest production. The lower Argentine planted area and lower yields could see their crop production around 47-50m tonnes, which would be significantly lower than the previous 54m tonne estimate.

Currency is another issue affecting prices and UK oilseed rape prices have fluctuated as a result of the euro rate against sterling moving from £1.13 to £1.15 – a stronger euro is encouraging more imports.

Drought in South Africa is causing problems and rationing is taking place in Cape Town. Its maize crop planted area is put at 2.03m ha, which is a 12% reduction year-on-year and in 2015 and 2016, severe drought in South Africa reduced the country’s maize output, turning what is normally a regionally important exporter of maize into an importer. However, due to a large crop in 2017 they have large maize stocks to fall back on which will help to replace any reduction in production from this year’s crop.

There have also been concerns regarding the Argentine maize crop due to prolonged dry weather. It is the world’s third largest exporter of maize and 92.4 % of their intended maize crop has been sown – however, there are still regions where a considerable area has yet to be planted, with fears that the dry weather conditions will have an adverse effect on yields.

The current USDA forecast is 42m tonnes but if the Argentinian yield matches the lowest yield in the past five years, production will be around 36.5m tonnes, which would be 4.5 m tonnes lower year-on-year but still around 6m tonnes above the five-year average.