The end of March and Brexit is fast approaching and this is increasingly becoming more important – but anyone trying to forecast the outcome is no further forward than they were a year ago.

This is having a depressing effect on currency and commodity prices, with still no idea if we are leaving with a no deal scenario, extending the discussion period, having another referendum or some concoction in between.

One thing that has been relatively consistent, recently, is the weather. Following just 5.4mm of rain in January – in this part of the Borders at least – this month to date looks as though it will be another similar one, with little or no rainfall so far.

Even the temperatures are above normal and forecast to reach 18°C at the end of this week further south. In Scotland, that would be a record figure for February and we have already spotted seed drills out in the Borders getting the first of the spring beans sown, along with some spring barley further sown south.

There has also been a lot of nutrients being applied and the ground is in great shape for machines travelling on winter crops without doing much damage to tramlines. Crops are starting to grow as the crocuses, snowdrops and daffodils are becoming more evident as well.

If we don’t get any snow to provide moisture required for crops and grass, we could be looking for rain to move the crops on as spring approaches. Many rivers and reservoirs are lower than we would like to see at this time of year – but let’s not have another Beast from the East.

Due to the impending Brexit, UK commodity markets have been falling and global markets have not been helped by the introduction of a US bill that would impose additional sanctions on Russia. This threat led the rouble to fall in value to a month low against the dollar.

In export markets, this led Russian wheat to gain competitiveness once more even though recently the pace of Russian export business has been slowing with the US, Ukraine and even France beginning to compete for tenders. This would have gone some way to making up the 9% difference between US exports year-on-year which will be required to reduce a large carry-over into next season.

Recent information suggests that Russia has 10m more tonnes of wheat than in 2018 and has increased crop production for 2019, which may reach 80m tonnes. I that is so, this would suggest a bearish outlook for Black Sea and global new crop markets.

EU wheat exports have been slow this year and remain behind the pace to reach forecast levels but by February, EU wheat exports totalled 10.1m tonnes. If this level carries on at the current pace, then full season exports could total 16.4m tonnes – though this still falls short of the latest EU export forecast of 18m tonnes, which was previously put at 20m tonnes.

In order for the EU to continue to win tenders and export the surplus, EU prices had to fall and the May, 2019, UK old crop wheat futures fell to their lowest level in this current season, down to £167.35 earlier this week.

Therefore, with reduced EU exports leading to higher than anticipated theoretical stock levels and a lack of incentive to hold wheat, the bearish outlook for the remainder of the season could very well continue.

As world wheat prices continued to fall, this encouraged Egypt to tender for additional tonnage at lower levels and recently the EU wheat prices have followed the global prices and recently fell to a two-month low. It is now one of the cheapest sources of wheat for world buyers.

The current season stocks-to-use ratio of major wheat exporters, at 14.7%, is the lowest since 2013-14 and such low stock levels means that a large level of production will be required to return stocks to normal levels.

Over the past two weeks, the May Liffe, 2019, wheat futures dropped by £5.15 and new crop November futures fell by £4 per tonne to £150.15 – which is still a £17.20 discount to new crop. This gap is largely being driven by expectations of a large global wheat crop in 2019-20.

However, this would appear to contradict the forecast US 2019-20 winter wheat crop which is estimated to be down 4% on 2018 and at 12.66m ha, the planted area is the second lowest on record. The US winter wheat area has decreased year-on-year since 2013, while the soyabean area has increased over the same period.

UK ex-farm bread milling wheat was up £3.90 last week to £181.10 and feed wheat remained unchanged at £178.40. Feed barley was down £2.20 to £151.50, which is a price discount to wheat of £17.90 per tonne and with a large volume of barley and maize still in the UK, we can expect this discount to continue.

The falling feed barley price has been driven by a lack of demand from the animal feed sector and high volumes of imported maize in the market. The milder winter and reduced cattle numbers have certainly reduced feed requirements.

Barley usage in animal feed is down more than 13% for the year-to-date and increased maize imports in December, 2018, were up from 162,000 tonnes in December, 2017, to 195,000 tonnes. Season-to-date maize imports now stand at nearly1.3m tonnes, around 300,000 tonnes more than the same period last year and with this high volume of maize imports and reduced barley feed usage the large barley discount to wheat is set to continue.

UK domestic demand for feed wheat also remains slow in the absence of any ethanol demand and a greater reliance on animal feed requirements is required to support prices.

Oilseed prices are continuing to fall as the ongoing trade dispute between the US and China continues. OSR delivered Erith was down £5.50 last week to £328 per tonne, even though the Chinese have actively been buying US soya over the last few weeks with reports that up to 5m tonnes have been traded.

The renewed purchasing of US soya by China is badly needed as stocks remain high in the US, plus news that the Brazilian soya harvest is now 36% complete – well ahead of last year due to dry and hot weather. This indicates that Brazilian soya will be available for export earlier than in previous seasons. Old crop US soya, then, will have to compete against the newly crop and because of the US-China dispute, US soya exports have been much less than normal.

Prices were put under further pressure by Argentinean soya forecasts higher by 52m tonnes, which add to high stock levels. But should soya prices drop further, then there could be a reduced incentive to plant the crop going forward – that would be a reversal of the trend seen in recent years.