The ‘Beast from the East’ has dominated our weather and travel this past week and in the Borders we were unable to move from home for six days, with roads blocked due to the wind blowing the snow off the fields relentlessly for days on end.

Coupled with the severe cold weather and wind chill feeling, it was altogether an unpleasant experience and reminded us of the two weeks in or around 2000 when we had no power or light. It will take some time for the snow to disappear and no doubt that will bring some flooding as well just to compound the difficulties with frozen ground underneath.

Wheat futures have been rising and one of the factors has been the weather and with temperatures here in the UK in some areas at -10°C, this could have an impact on some winter crops as the wind had blown the snow off the fields. As a result, they were not protected from the severe low temperatures that were experienced non-stop over several days.

As this weather came from Siberia and all places east, winter wheat across large swathes of Western and Southern Europe could well be at risk of winter kill as well.

However, up to the point where the ‘beast’ arrived, the first few months of 2018 have been relatively milder than usual across most of Europe – but I would not include the UK in that statement. Daily temperatures in central, eastern and north-eastern regions of Europe were actually from 2-7°C above the long-term average. This had restricted the acclimatisation of winter cereals to lower temperatures, making them more at risk to the recent cold spell. Acclimatisation to cold is important for crops such as winter wheat and is called ‘hardening’.

The unhardened nature of winter wheat across parts of UK, France, Spain and Italy meant that the crop was more exposed to severe frost. In Eastern European regions, such as the Baltic countries, Russia and Ukraine, full hardening had already been achieved with only slight localised winter kill damage reported so far.

Time will tell if the recent rally in wheat futures is sustained and it will likely depend on how long the cold weather persists on the continent and whether it has been severe enough to impact crop development. Weather in South America and the US is also likely to remain a driver in the short term. Soil moisture is lacking in the US and wetter than normal weather is impacting on maize crop plantings in Brazil.

Continued drought across the US Plains over the past few weeks has further reduced the rating of winter wheat crops across numerous states. In Kansas, the largest planting state for US winter wheat, the proportion of the crop rated as ‘good or excellent’ declined from 14% in January to 12% in February, and this compared to last year’s crop at the same stage when 43% of winter wheat was rated at that.

No improvement in condition was seen in Oklahoma between January and February, when crops rated as ‘good or excellent’ remained at a low 4%. Several other states were rated lower than last year and this is giving concern in the market for their hard-red wheat – the largest wheat class in the US – which is mainly milled for bread.

In terms of global wheat trading, there has been four consecutive seasons of surplus production. But, there is a problem coming which has not been obvious as production has been increasingly driven by yield, which presents a risk as it means a greater reliance on the weather.

World record wheat production has been achieved consecutively in the past four crop seasons – and another record breaking year is projected for 2017-18. There is a concern that this would not have been the case if yields had not been as good as they have in past years and the high stock levels would not be where they are at present.

The balance between available supplies of wheat and domestic consumption is now estimated at 2.733m tonnes, but is still 15% less than last year at this time. While the wheat balance has been estimated to marginally increase, the UK barley balance for 2017-18 is tighter than November’s estimates – down 277,000 tonnes at 2.206m tonnes. This is due to a combination of a decrease in estimated barley availability, combined with an estimated increase in domestic demand for barley.

GB animal feed production, from July, 2017, to January, 2018, has been estimated at 8.14m tonnes, which is a 4.6% increase over the same period last year. As a result of increased demand, the amount of wheat and barley used in the production of GB animal feed has increased by 2.2% and 26.9%, respectively, during the season to date.

Feed barley prices remain fairly good, with the usual discount to feed wheat narrowing across most parts of the UK. Globally, feed barley prices also remain strong but old crop malting barley premiums have come under pressure with the feed barley market firming and limited fresh demand from UK maltsters.

The spread between UK spot ex-farm feed wheat and barley prices has continued to narrow and for the week ending February 22, the spread reduced to £8.70 per tonne, which is the lowest since June, 2016. Ex-farm feed wheat prices have remained stable since early October, while ex-farm barley prices have risen.

This narrower gap between feed wheat and feed barley prices may start to reduce the incentive to include larger volumes of barley in compound feed. So that’s one to watch.

Chicago soyabean futures have nearly reached a seven-month high due to the long standing dry weather in Argentina and production is now forecast to be at least 10.5m tonnes below last year’s level. Its maize crop production has also been reduced, due to ongoing drought, by 5m tonnes down to 35m tonnes.

In Brazil, harvesting of oilseed is being delayed by excessive wet weather and as at the end of February, only 9% of the planted area had been harvested compared to 31% last year; and only 16% of the maize crop has been planted, in comparison to 48% in 2017.