The continuous strong drying winds and warmer weather around 10°C, fields have dried up and spring sowing has progressed well – and that includes potato planting which is now well on its way

That said, the winds have been enough to hold back fertiliser and spray applications but these are now catching up as well when they can. After 26.7mm, or just over one inch of rain in total for both January and February, March produced 82.5mm, or 3.25 inches of rain to give a total for the year to date of 109.2mm, or 4.3 inches here in the Borders – that included a two-inch snowfall of a few hours.

The UK area planted with wheat for harvest 2019 is due to be the highest since 2014 and this will result in a large tonnage looking for a home, but this will depend on factors outwith our control, such as the weather and a lot can happen between now and harvest, although Brexit negotiations should not have an impact on that!

With a forecast planted area in the UK of 1.871m ha and taking an average yield, this would produce around 15.5m tonnes and if the yield varies by 5% either way, this would be a production total between 14.7m and 16.3m tonnes, which have to find a home somewhere.

Livestock and poultry feed will use a tonnage, but both these sectors have seen a drop in numbers recently because of better weather.

Human and industrial usage will also be dependent on what bioethanol plants are operating. At present, it looks likely to be only one plant and again wheat usage will be dependant on the price of maize which looks to be in plentiful supply and, like wheat, will be fighting to find a home given competitive prices.

Demand for flour milling is largely stable, while the usage of wheat in distilling will depend again on the value of maize.

With potential exports around 300,000 tonnes for this season, plus similar animal feed and human and industrial demand similar to last season, if this harvest produces more than 15m tonnes, the UK could need to export between 900,000 and 1.4m tonnes next season.

At this stage of Brexit, we still do not have a clue as to the relationship that the UK will have with the EU going forward.

If the UK has a free-trade agreement (FTA) with the EU then trading remains relatively straightforward. Should the UK leave the EU without a FTA, then there is uncertainty but trade will still be possible via the tariff rate quota (TRQ) that the EU already has in place.

The EU currently has two TRQs for wheat that the UK could access in a ‘no deal’ situation and the TRQs allow just over 2.5m tonnes of wheat to enter the EU each year, with a €12 per tonne tariff – at that rate the UK stands a good chance of sending wheat to the EU.

With a tariff in place, the UK will need to fix prices €12 below physical prices in the EU and the impact of this will be varied depending on the relative strength of sterling against the euro.

The crop year 2016-17 was the last time the UK exported a significant volume of wheat to the EU and so far this season third country wheat imports into the EU stand at 3.5m tonnes and it should be noted that the UK will not be in a position to supply some of the grades of wheat required. This leaves a volume of grain which will need to find a home outside Europe.

Outside the EU there will still be opportunities for UK wheat go further afield, but it would be with greater global competition and also depend on the cost of freight.

UK potatoes will not be able to enter the EU in the event of a no deal, thereby stopping Scottish seed access to a market worth up to £15m a year. With an estimated 20-30% of the UK’s 96,000 tonnes of seed potato exports planned to go to the EU, Scottish growers would be hard hit and the same applies to the 162,000 tonnes of ware export trade to Europe and Ireland.

The weather in the UK between now and harvest will have a bearing on cereal yields and this is also the case in the US and Australia where they are having contrasting weather conditions.

In the US, widespread flooding and below average temperatures in the US plains and Mid-west remain an issue for growing crops and warmer weather could compound the problem as snow-melt will add to ground moisture levels.

This weather is creating concerns over early planting for maize and the recent USDA planting estimates put maize at around 92m acres, which is an increase of 2.2m acres on last year and if they get more snow melt, this could delay planting even further.

That might lead to an increase soyabean planting area due to its later planting window and Chicago maize futures for new crop December, 2019, have increased by $2.66 per tonne as a result. For old crop, melting snow and flooding across Iowa, Nebraska, South Dakota and other states has impacted on farm stock levels. Losses have been felt as the heavy stocks of grains and soyabeans have been flooded.

With regards to new crop, a heavy cover of snow across the spring wheat states of North Dakota and Montana could now pose a threat to spring wheat planting.

Representing 27% of all the US wheat area in 2018, the US spring wheat area is expected to increase following wet conditions for winter planting but the total US area planted to wheat is expected to be down around 4% from last year and the forecast of 18.51m ha is the lowest on record.

Meanwhile, Australia is currently experiencing the hottest summer on record since 1910. With wheat planting scheduled for April, any rainfall forecast will benefit soil moisture levels greatly to avoid consecutive crop failures across eastern regions of Australia which has raised its El Nino forecast to around a 70% chance of developing.

The previous El Nino event in 2015-16 saw crop production levels drop amidst wide-spread drought. Crop failures last season from drought resulted in wheat production 4.975m tonnes below 2015-16 levels.

China has moved to ban all new purchases of Canadian canola (oilseed rape) due to imports of dangerous pests in the product, which is further escalating tensions between the two countries. China accounts for roughly 40% of Canada’s exports of canola and this ban is likely to lead to accumulation of stocks which will add pressure to Canadian canola and EU rapeseed markets.

Total supplies for 2019-20 are forecast to rise to a record 23.4m tonnes as increased carry-over stocks are expected to outweigh a drop in production.

So, oilseed rape markets have traded lower this past week with changes in values close to reflecting movements in exchange rates and oilseed rape delivered Erith was down £2.50 on the week to £312.50 per tonne.

Old crop prices were down £4 against a 1% firming of sterling but after that a weaker pound pushed the market up by £2 per tonne – volatility continues given all that is going on in the political world at present.

Oilseed markets have been getting some support from concerns about dry weather conditions in Europe and the possible reduced canola plantings in Canada, given the current Chinese import ban.

The lack of development in the trade talks between the US and China continues to add to end of season soya stock expectations which are estimated at 26m tonnes, an 118% increase on the year. The latest export commitments data from the USDA shows that the US still needs to export 9.5m tonnes of soya to reach its export forecast.

The Chicago old and new soya futures have both dropped by over $6 per tonne this past week due to large supplies depressing prices which is due, in part, to low US trading, flooding in the US and good progress with the Brazilian and Argentinean harvests – Brazil is 66% complete, or 4% ahead of the five-year average resulting in increased global competition for soya markets, putting pressure on prices.

There are also some quality concerns there following rainfall during harvest and increased rainfall is forecast for the next two weeks which could limit the price fall in their soya markets.

Given all the Brexit and global weather issues back home, the UK ex-farm prices remain steady, with Bread milling wheat unchanged at £176.90, feed wheat up £1.80 to £163.40 and feed barley down 10p to £131.70 which still leaves barley at a £31.70 per tonne discount to wheat.

Old crop May, 2018, Liffee feed wheat futures were down £1.05 per tonne this past week to £163.50 and new crop November, 2019, futures were down 75p to £147.50 which is an old to new crop difference of £16 per tonne.