IT'S A Happy New Year so far and so let us hope for 2019 we get the weather that we had for last year’s harvest and autumn planting season.

One aspect we do not want is a recurrence of the 'Beast from the East' in the next month or two that caused so much havoc early last year. Since the beginning of the festive season until now, we have had benign winter weather with no rain, very little frost and above average temperatures but now we are seeing some moisture and high winds.

Fields continue to look well and if this weather continues it will not be long before nutrients are being applied to crops that are beginning to think that spring is just around the corner at the same time as spring plants in the garden begin to appear above the ground.

December rainfall, according to the famous Lochton Farm records, totalled 34.2mm and for the year to date 613.6mm, or 24.1 inches, which is a few inches below the average for this region. It is nice not to see puddles and bare bits in the fields, as we have seen so often in recent years at this time.

As in the past, weather plays a part in global commodity prices and this year is no different from others, with mixed South American weather giving cause for concern for both cereal and oilseed markets. In Brazil, continued dry weather is proving a challenge for the soyabean harvest and dryness during key development stages of the crop has reportedly led to yield losses and has also proved challenging for the first maize crop in Brazil and rainfall will be needed if the crop is to reach its potential.

The wheat harvest in Argentina is now almost complete but recent rainfall has done some damage to quality and 43.3% of its crop is rated as being in good to excellent condition compared to 48.3% last year. Their soyabean and maize planting season has been delayed by rain which will affect crop development and with the dry weather set to continue in Brazil and rain to continue in Argentina, this will support global prices.

The weather has helped to boost US exports but due to the ongoing US federal shutdown, the publication of reports, quarterly stocks and winter planting figures are being delayed until the political/fiscal situation in the US is resolved.

Here in the UK, the Liffe old crop futures for May were up 75p to £178.75 and for November new crop, up 25p to £162.25. UK ex-farm bread milling wheat was unchanged at £180, feed wheat was down 50p to £171.60 and feed barley was also down 50p to £165.10.

As can be seen from these figures, the UK markets have been quiet over the festive season but US and EU markets started the new year trading firmer, with Chicago wheat futures up $1.47 last week and Paris wheat futures up €3.25 for the same period. US wheat prices are now able to compete with cheaper wheat elsewhere and has the prospect of increasing exports.

With the uncertainty regarding Argentinean wheat quality, this makes it increasingly likely that French exports could pick up into North Africa in the near future.

At this time, the EU continues to be a nett importer of cereals in 2018-19 with the record pace of maize imports outstripping the slow wheat and barley sales. Maize imports in 2018-19 in the week ending January 6 this year stood at 11.7m tonnes, some 48% ahead of last season. Around 50% of the maize imported so far has come from the Ukraine, with a further 40% coming from a combination of Brazil and Canada.

The majority of the EU’s position as a nett exporter has been historically driven by high wheat exports. However, this season a combination of tight supplies and competition from strong Black Sea supplies has seen EU wheat exports fall 25% behind last year’s total and as at January 6 the EU had exported just 34,000 tonnes of wheat, compared with 334,000 tonnes a year earlier.

The weaker pound continues to support prices by pushing the UK closer towards export parity and the latest figures from the AHDB project a 2.3m tonne wheat ending stock which could leave an exportable surplus up to 800,000 tonnes.

The UK 2018 harvest production is now estimated at 13.95m tonnes, with the UK wheat yield average down 6.2% – that's compared to the 5.3% fall previously reported and is the smallest crop since 2013.

Moving forward, the new crop prospects look good with an estimated 4% increase in wheat acreage drilled and now well established in near ideal conditions and given a reasonably good growing season an average yield could produce a 15m tonne crop and the UK winter barley planted area is estimated to be up by 14% at the expense of spring barley and oilseed rape.

Oilseed markets have been relatively quiet as the price of oilseed rape delivered Erith is unchanged at £337 per tonne. However, soyabean futures have found some strength on continued concerns around the condition of the Brazilian crop.

Trade talks between China and the US have begun again this past week and since December China has resumed purchases of US soya but again due to the ongoing US federal shutdown, the volumes purchased are unknown.