A spell of relatively settled weather has allowed harvest to progress and allow winter crops to be sown as well and it looks like around 70% of the Scottish spring barley crop has now been harvested – England is now more or less complete.

Overall, there are good yields and low nitrogen levels in the spring crop have been recorded, however various germination issues are occurring as a result of the wet August experienced across the country.

Yields for UK winter barley are estimated at 7.3-7.5t/ha, which is 4-7% above the five-year average of 7t/ha giving a UK winter barley crop estimated at 3.08-3.17m tonnes – up 17-20% year-on-year. This compares to the AHDB 19 Recommended List trial sites around the country, where the 2019 yield is 10.05t/ha, compared to a five-year average of 10.02t/ha.

With a 7.3m-plus tonne crop of winter barley production and a 5.9M tonne domestic usage in the UK this could see an exportable export surplus well over 1m tonnes. In the past three years, 94% of the UK barley exports have been to Europe and with the October 31 Brexit deadline approaching, this raises concerns for where this season’s crop could go.

Outside of the EU, demand mainly comes from China, Iran, Japan, and Brazil. For many of these destinations, it would be difficult for the UK to be competitive against other barley producers due to high freight costs and non-tariff barriers, such as contract specifications.

With regards to the EU, the UK would have access to the Tariff Rate Quota (TRQ) of 307,100 tonnes per calendar year of any origin barley subject to the reduced tariff of €16 per tonne. As at August 26, 305,900 tonnes of this TRQ was still available.

Based on the five-year average of UK barley exports to the EU, it is unlikely that more than 200,000 tonnes will move between November 1 and December 31, 2019 on the current TRQ leaving around 750,000 tonnes to carry into 2020.

Although export competitive, barley is suffering from minimal continental demand post-October. With larger wheat and barley crops in 2019-20, barley will need to maintain its traditional discount to wheat, or more.

Barley trade has been at a record pace so far this season, with 290,400 tonnes of spot purchases since the beginning of July to August 22. Some of this has been driven by prospects of a no deal Brexit and due to movement limitations, this sort of trade will likely fall back as the end of October approaches.

If 450,000 tonnes of barley could be moved pre-October 31, then the UK could be left with around 950,000 tonnes to export post-Brexit. Last week, Saudi Arabia bought a feed barley tender of 760,000 tonnes for an October to December shipment and this purchase did little to support UK feed barley prices, which again fell this week.

Following a mid-week 1% devaluation of sterling against the euro due to current political ‘issues’, this gave an immediate boost to domestic prices. But, by the end of the week, sterling strengthened again slightly, which saw lower wheat prices which is putting more pressure on barley values.

Wheat futures for November, 2019, were down £2 on the week to £131.50 and fell to £129.75 mid-week as global wheat prices continue to fall in an increasingly well-supplied market. On September 1 in 2018, the November, 2019, feed wheat futures contract was quoted at £168, so it is now more than £38 down since that time. May, 2020, futures at the same 2018 mark, were at £172 and currently stand at £137.30 – nearly £35 down.

With the possibility of the Prime Minister calling a snap general election, this caused sterling to go into freefall and in one day this week the pound lost 0.82% against the dollar at $1.2064 and 0.61% against the euro, now at £1.0998 euro equivalent. This should, though, offer support to UK physical prices.

Above average wheat yields look like increasing the size of the 2019 UK wheat crop production, with UK yields coming in at 8.8-9.0t/ha, which is 6-8% above average and would see production at its highest since 2015 at 15.9-16.2m tonnes. AHDB’s List trial sites saw the 2019 wheat yield at 12.50t/ha, compared to a five-year average of 11.31t/ha.

There is still a lot of wheat to cut in Scotland and the UK wheat harvest is around 80% complete, so these yield and production figures could change as harvest progresses.

The Tees-side bioethanol plant will use 70% UK wheat this season, which will help to use some of the surplus, but there will still be a need to export a significant amount and the weaker sterling will help this.

The International Grains Council has raised its previous estimate of world wheat production and this is now put at 764m tonnes, 31m tonnes up on last year. Year-end stocks are likely to rise to a record 271m tonnes, despite a year-on-year rise in demand to 758m tonnes.

France has put its wheat production up 15% compared to last year at 39.2m tonnes, the second highest on record and will need to export more than 20m tonnes, a level achieved only three times previously.

The Ukraine has already seen a 46% increase in wheat exports so far this year with 3.7m tonnes exported since July 1 and this could reach a total of 21m tonnes, compared to the 15.53m tonnes exported last season.

EU wheat production estimates have been raised to 150.2m tonnes and production estimates have also been raised for the US, Canada and Ukraine, further adding to global export competition. Increased tension between the US and China has seen crude oil prices fall and with a poor sugar market, maize demand for ethanol may fall as well.

With the UK oilseed rape harvest more or less complete, the AHDB

had estimated UK yields to be 3.0-3.3t/ha, compared to the five-year average of 3.5t/ha. This would see total production between 1.5-1.7m tonnes, which would be 16-23% below last year’s

crop and the smallest since 2004. The List trial sites averaged 5.03t/ha compared to a four-year average of 5.24t/ha.

It is also interesting to note that the List trials’ seven winter oat sites averaged 9.39t/ha, compared to a five-year average of 8.91t/ha.

The oilseed rape price delivered Erith dropped by 50p to £349 per tonne for November delivery, but with shortages of rapeseed, we can expect prices to rise. The UK and Europe will be in short supply of rapeseed, due to poor harvests, resulting in increased imports of oilseeds and oilseed products.

Some import requirement is usually fulfilled by Canada, however it has estimated a 9.3% drop year-on-year in canola production due to a decrease in harvested area.