The month of March is slipping away and still not a lot of spring work has been done following the wettest February since records began in 1862.

A fourth successive weekend of severe weather in the wake of Storm Ciara, Storm Dennis and Storm Jorge saw the UK average rainfall for last month at 202.1mm, or 7.95 inches, which beat the previous record set in 1990 of 193.4mm.

This was more than three times the amount of average February rainfall in England, but here in the Borders, at Lochton, near Coldstream, compared to over the Border, during February 82.9mm, or 3.36 inches of rain fell to give a total for the first two months of 118mm, or 4.64 inches for 2020 up to that point.

Even at that relatively lower level, fields have still been too wet to do any drilling but fertiliser has been applied and at last there is some signs of plant greening – even though we had our first dusting of snow this winter early last week, that soon disappeared.

Covid-19, or or coronavirus, has had an enormous effect on the global economies, resulting in panic-selling of stocks and shares and this has spilled over into all other commodities, pushing world prices down and has led to governments and central banks to initiate financial packages to combat the problem.

The US Federal Reserve Bank cut US interest rates, combined with a large package of quantitative easing. In response, the US dollar has weakened and could well weaken further and the weaker dollar supports the value of US dollar-based commodities.

US wheat futures fell to lows not seen since last September and their losses since mid-January rose to 15%. However, the impact of this on UK wheat futures was reduced as sterling lost ground to the euro following the Bank of England reducing the base rate by 0.5% last week.

Sterling continues to be very weak against the euro, falling to its lowest value since September with £1 equating to €1.09, compared to €1.204 in mid-February. As the exchange rate falls, it becomes more expensive for the domestic market to import goods and also supports the value of UK agricultural products and reduces the cost of borrowing with lower interest rates but does not encourage or help those who have saved money and looking for greater returns.

The fall in the value of sterling helped UK old crop feed wheat futures for May, 2020, to end last week just 0.05p down at £149.50, despite mid-week volatility. By comparison, Paris’ May, 2020, wheat futures ended the week €4.25 lower at €177.50. November, 2020, new crop wheat futures currently stand at £161 per tonne and concerns over new wheat crop availability resulted in milling wheat premiums being quoted at £38.55 per tonne over futures prices last week for May delivery – which compares to £30.50 per tonne over futures at the beginning of January.

The UK wheat market is also supported by a likely shortfall in availability next season due to the smaller than normal crop expected because of reduced sowing in the wet autumn. However, general disruption to the economy as a result of Covid-19 is likely to lead to cuts in demand for the short to medium term.

UK delivered wheat last week was down 50p to £186 per tonne, feed wheat was unchanged at £157 and feed barley was down £1.50 to £129.50, which means that feed barley is maintaining a healthy discount to feed wheat in order to remain competitive for both feed and export purposes as the domestic market continues to move at, or close to import parity.

January wheat exports stand at 50.3M tonnes, with non-EU exports of 13.3m tonnes. Total season exports to January now stand at 891,700 tonnes, with just over 2m tonnes remaining of the 2.899m tonne forecast available surplus for 2019-20.

Last week, the USDA published its March updated estimates for world supply and demand, there were several minor changes with Australian wheat production being cut by 400,000 tonnes, bringing its total to 15.2m tonnes. This was offset by an increase of 500,000 tonnes in Argentina, bringing its total wheat production to 19.5m tonnes.

In total, the USDA estimated an overall increase in world production of 440,000 tonnes, reaching a total of 764.49m tonnes. Additionally, a 740,000-tonne increase in expected consumption reduced the year-end stock by 870,000 tonnes to 287.14m tonnes.

The adverse wheat drilling conditions and subsequent continuous rainfall affecting much of parts of Europe has led to Strategie Grains making further cuts to 2020 EU wheat production, which is now put at 1.9m tonnes less than last month’s forecast and now totals 136.7m tonnes, or down 6.6%, due to cuts mainly in France, Germany and the UK. That would make it nearly 10m tonnes down on last year.

UK wheat production is forecast down to 10.78m tonnes, which would be a reduction year-on-year of 32.9%, French production is put at 33.4m tonnes which is 15.5% down year-on-year and Germany’s wheat production is forecast at 23.3m tonnes which is up 1.9% year-on-year.

Following several years of drought in Australia, recent rainfall across its main wheat producing areas has created far better soil moisture and could see their 2021 wheat planted area up from 10.1m ha to 12m ha.

The UK exported 99,200 tonnes of barley in January and to date the total is now 1.308m tonnes, out of a total available surplus of 2.168m tonnes – but this is still well below the tonnage exported in 2019-20 and there is very little domestic demand for either feed or malting barley.

In France, only 34% of the intended spring barley has been sown, compared to 96% last year at this time, so it is not just the UK that has been having wet weather recently holding up spring land work.

UK maize imports amounted to 203,900 tonnes in January and the total imported tonnage for the season up to January was 1.448m tonnes out of the 2.3m tonnes expected for the 2019-20 season.

The EU is forecast to produce 17.85m tonnes of rapeseed which would be a 5.7% increase on last year’s crop which represented a 13-year low. With carry in stocks falling, it is likely to leave the EU with higher demand for imports in 2020-21 which could be as high as 6.5m tonnes.

Oilseed rape delivered Erith, last week, was down £17 per tonne to £318.50 as sterling weakened by 4.38% over the last seven days. The weakening of sterling has helped shelter domestic rapeseed prices from some of the losses seen in EU markets. Paris rapeseed futures closed last week at €352.50, which was €25.25 down on the previous week.

Oilseed prices are also reacting to the pressure on crude oil markets as OPEC were unable to strike a deal with Russia on oil production outputs. The nearby Brent crude oil futures contract traded at its lowest since 2016 closing last week at $33.85 per barrel which was down $11.33 on the week and a barrel is now worth less than half of what it was worth at this time last year.

One thing that might help to steady OSR prices, would be China’s increased imports of soyabeans, which is projected to see a 7% increase this season.