IN the Borders we have experienced a spell of continued dry weather, but with periods of coastal cloud lasting for days at a time.

Crops are looking good, although there are patchy areas in some fields. Land work is up to date but a night’s gentle warm rain would do a lot of good as there are now signs of drought stress creeping in.

Wheat futures are remaining strong, backed by weather issues around the world continuing to support prices.

In Australia, dry weather is hampering planting as is the case in Canada, where rain will be required soon to get the crops up and running.

Russia is also experiencing some challenging conditions with continued drought. Its statisticians have already cut its wheat forecast by 5m tonnes down to 73.5m tonnes – which was already way down from 2017's total of almost 86m tonnes. Russia’s total cereal crop is forecast to be around 107m tonnes this year, compared to 133m tonnes last year. Also, its spring wheat planting is reported at 5.2m ha compared to a target area of 12.9m ha and the spring barley area of 5.7m ha is almost 2m ha down from target.

It is still hot and dry in North-east China and it could have 10-12m tonnes of maize crop risk and in Brazil maize production is now forecast to be down to 79m tonnes, compared to 98m tonnes last year.

The US' southern plains – the main hard-red wheat area – remains dry and although some rain is forecast it will take a significant amount to improve crop conditions and harvest is fast approaching.

Nearer to home, EU cereal crops are generally in good condition and recent warm weather helped growth, but there is some concern for late-sown spring crops with insufficient root development.

Dry conditions in central and eastern Europe has seen crop yield forecast cut and oilseed rape is forecast down from the five-year average of 3.28t/ha to 3.19t/ha.

EU wheat exports for the year-to-date stand at 18m tonnes compared to 22.5m tonnes last year at this time. Maize imports are up from 10.7m tonnes to 15.4m tonnes.

So that all adds up to the latest May supply and demand wheat figures being the tightest for four years. The 2017-18 balance between availability and consumption is estimated at 2.58m tonnes in Defra/AHDB official estimates – that is down 6% from the previous estimate last March. Many in the trade believe that supplies may be even tighter than the official statistics suggest.

UK wheat domestic markets have been affected by a lack of available spot grain to satisfy demand for feed and milling wheat and this has seen delivered wheat prices significantly strengthen this past week. However, consumers do not want to buy expensive wheat at this stage of the season when prices may drop when harvest gets underway soon.

Similarly, old crop barley prices have been static recently as demand has been fulfilled by available supplies.

However, new crop barley prices have increased across the UK following wheat prices upwards. Some feed compounders are buying in supplies now for next winter to take cover against any rise in cereal prices.

Oilseed rape prices have been also been rising. That, in part, has been due to the euro/dollar exchange rate, given that oil around the world is mainly traded in dollars. This provided additional support to European oilseed markets.

Oilseed rape has risen buy £10 per tonne this past month for old crop and new crop is showing gains of £15 per tonne – £6 of which has been achieved this past week.

With all the weather issues and tighter supplies, we have seen Liffe futures trading at a new contract high and July, 2018, old crop wheat is up £4.60 on the week to £156 and for November, 2018, new crop up £5.75 to £158.25.

These prices have been helped by the euro at a six-month low against the dollar. Although there has been little change in the sterling/euro rate, as many commodities trade in dollars, this has helped support EU prices.

The International Grains Council has now put the global wheat crop at 742m tonnes which is 16m tonnes down from 2017. Also, end stocks are tightening too – these are estimated at 258m tonnes, down from 262m tonnes last year.

However, maize production is up from 1044m tonnes to 1055m tonnes, but end stocks are almost 50 tonnes less than last year.

The US-China trade dispute issues have been reduced due to ongoing negotiations, so both countries have put on hold threatened tariffs on each other’s goods – which included US soyabeans – until a deal is negotiated. While the 25% tariff had not yet been applied to US soya, the threat that any tariff could have been applied retrospectively, resulted in China buying more beans from Brazil, putting pressure on US prices.