AS June beckons it looks as if we have had sufficient rain for now to keep the cereal crops moving on – but temperatures are still on the low side for this time of year.

The announcement made last week by Theresa May who is standing down because of her Brexit ‘issues’, the ongoing US trade war with China, weakening sterling, wet weather in the US is all adding up to commodity price volatility. It is, therefore, very difficult to predict just what will develop going forward.

The November, 2019, Liffe feed wheat futures were up £4.50 last week to £151.75 and earlier this week were up again by £3.75 to £153.50; while November, 2020, futures last week rose by £2.90 to £153.40.

UK ex-farm bread milling wheat was up £1.80 to £173.80 per tonne, feed wheat was down £5 to £147.40 and feed barley down £3.70 to £123.40 – which was a discount to feed wheat of £24 per tonne as at the end of last week.

The UK discount into new crop has now narrowed and domestic old crop prices have found support from the recent increased new crop prices, but the immediate impact on UK grain prices will continue to be currency.

The recent weakening of the pound, having supported markets, will be a major watch factor over coming weeks and should currency weaken further, this could offer further temporary support to UK producers. However, more Brexit uncertainty will continue to make new-crop prospects somewhat unclear.

New crop feed barley prices lifted on the back of the firming wheat prices this past week, but did not rise as quickly as wheat hence the spread between feed wheat and barley increasing as it has done. Again Brexit uncertainty raised the question of the potential impact that it could have on barley.

Recent rainfall has helped the spring barley crops in most of the UK and crops show plenty of potential. Rain has also fallen in Germany, Poland and Central Europe, all of which were pretty dry areas until recently.

US maize markets have also continued to climb, recording gains almost every day last week as rains persist. As conditions there remained wet and further rainfall is forecast across the US Corn Belt, there is the potential threat that US farmers will be unable to plant their intended area of maize so new crop wheat futures have continued to find support from delays to US maize planting.

If rain persists, there is a potential for winter wheat crop damage, but the USDA are continuing to report crop conditions as 66% ‘good to excellent’.

Oilseed rape delivered Erith was up £3 last week to £321.50, which is partly due to the production prospects of EU oilseed rape. Estimates have again been dropped, this time to 17.7m tonnes, well below the previous forecast of 19.2M tonnes a month ago.

The support for rapeseed markets has come from many areas. Chicago soyabeans have generally been in decline since the start of April on the back of slow maize plantings in the US, but further support for rapeseed has been seen in the vegetable oil market.

Tightness in production of vegetable oils following the slowdown in oilseed demand has started to push the market up and has also been helped by the increased global consumption of vegetable oil. There is a downside as well, in that the increased planting of soyabeans in the US could also reduce support for vegetable oils.

However, there is increased speculation about the delayed planting of soya in the US which has helped support the markets as planting is now behind the five-year average and with further wet weather experienced last week, it is unlikely that much progress has been made. That said, delays also to maize planting, means there is some speculation that unplanted areas may be switched to soya.

The soya market is being hindered by the unresolved trade dispute between the US and China which is the crop’s main buyer. As a result, US soyabean exports are down 37% – which adds more tonnes to the global stocks.

There is speculation as to the potential tonnage of US soya going forward as aid payments to US farmers have recently been announced by the USDA. It is reported to be giving farmers a $14.5m aid grant to help farmers affected by the floods and the trade war with China but it at this time not known how farmers will qualify for the aid and how it will be distributed.

It is presumed that this aid will encourage growers to plant soyabeans as it is better to have a crop in the ground with an aid payment, rather than no crop at all.

Looking ahead, weather and progress of US maize planting and vegetable oil demand will be important to the direction of rapeseed markets. And that will impact the UK and Europe in general too.