Following 35.1mm of rain in January, 82.9mm in February and 45.3mm in March, this has produced a total of 163.3mm, or 6.4 inches, for the first quarter of the year.

Since the Covid-19 lock-down on March 23, to date rainfall in the Eastern Borders has been virtually nil apart from a few squally showers which has allowed spring sowing and other field operations to continue with no hold ups and most farmers have now completed their sowing and potato planting is now well under way, with rising soils temperatures also.

Winter sown oilseed rape is now growing, but spring cereal seed sown in the last few weeks is requiring moisture to kick start the growing cycle – but not is forecast. It only seems recently that we were waiting for soils to dry so spring work could begin.

The UK wheat markets have been less volatile than they were last month and currently the Liffee feed wheat futures for May, 2020, old crop wheat stand at £158.20, which is similar to last week and November, 2020, new crop wheat stands at £169.20, again similar to last week.

French wheat futures have risen more sharply and to highs not seen since August, 2018, due to more EU wheat exports which reached almost 25m tonnes – that is 67% up on last year and close to the season’s target of 31m tonnes.

UK wheat prices have been capped by firmer sterling and our old crop wheat surplus does not look as though it will be exported and will have to be carried over into the next harvest year.

However, new crop prices are being supported by the continuing dry spell, not just in the UK but across western Europe and crops will become increasingly stressed if we don’t get rain soon.

Russia is also experiencing dry weather and recent cold weather there has not caused much damage and so 94% of its crop is estimated to be in a satisfactory condition and could harvest a near-record 2020 wheat crop of between 80-84m tonnes.

The French wheat area at 4.6m ha is 7.5% down on last year and the smallest for 17 years due to the wet autumn and along with the reduced wheat area in the UK, and wheat production under 10m tonnes for the same reason, this will result in both countries producing a combined total of 11m tonnes less wheat than in 2019.

The USDA published its first national crop ratings outlining the condition of the US winter wheat crop. It rated the crop as 62% ‘good to excellent’ compared to 60% this time last year and the average of 47%. Overall, the wheat area was put at 44.65m acres – the lowest planted area since records began in 1919.

So its expected wheat production is put between 46.3-51m tonnes and even so, it is still expecting to have a large exportable surplus, which will put pressure on the UK’s wheat market. There are some areas such as the state of Kansas which is rated lower due to dry soil conditions but other areas are classed as adequate with regards to moisture.

The US is forecasting a maize planted area of 97m acres, which would be the highest acreage since 2012 and sent US maize futures to a 3½-low. This comes at the same time as a collapse in ethanol production which has dropped to the lowest level on record following the severe drop in crude oil prices. That’s exacerbated by fuel demand being down by more than 75% as the Covid-19 lockdown continues throughout Europe.

The maize futures drop has stemmed from reduced demand in the US on the back of weak crude oil prices and reduced fuel demand given that 37% of US maize is used to produce fuel. The collapse in ethanol prices and fall in maize prices have made soyabeans a more profitable crop and many US farmers might switch to soya instead.

UK barley exports for this season up to the end of February total 1.4m tonnes and further exports since then had been made possible due mainly to a weakness in sterling, but a strengthening of the currency is seeing exports dry up and a lower tonnage is now expected to move in the next few months.

There are no malting barley sales due to the Covid-19 situation and a lack of bottles and cans is making it difficult for brewers to switch production from kegs into something that can be consumed at home. The main problem is the loss of beer sales through pubs, restaurants and other events, although there are greater retail sales from supermarkets and other outlets directly to people’s homes.

According to AHDB figures, barley used by brewers for the season to date is 1.26m tonnes. The latest AHDB balance sheet estimate for total human and industrial use for the season is 1.93m tonnes, so 0.67m tonnes should be used up to supply the rest of the season. But with the ongoing lockdown and continued closure of pubs, restaurants and other events, there is no demand for beer within the hospitality sector.

If the lockdown continued for 15 weeks, then in total 63,000 tonnes of barley would not be required to produce malt for brewing for the remainder of this marketing season. That will likely have to be carried forward and would reduce brewers, maltsters and distillers requirements for grains from the 2020 crop.

With the AHDB early Bird Survey forecasting a 47% increase in spring barley planting, this is going to put pressure on 2020-21 malting barley prices and any remaining 2019 crop not yet sold as malting barley for brewing may now struggle to find a domestic home ­– other than in the feed bin.

At the end of March, approximately 37% of the UK winter oilseed rape crop was rated as either in ‘poor’ or ‘very poor’ condition. This is up from the 17% reported in March, 2019. Disease pressure has been low over winter but plants have not grown due to pest and waterlogging damage.

In Europe, a fall in demand for biofuels, coupled with a drop in sales of vegetable oils to the commercial food sector because of coronavirus, has meant that some crushing plants have ceased production altogether. Currently, crushing level is at around 50% of capacity from that of a few weeks ago.

From what was a shortage of oilseed has now turned into a lack of demand in a very short space of time. Furthermore, with restrictions on disposable incomes, we should not expect a rush back to the restaurants once the lockdown is lifted.

A large carryover of imported stock, therefore, looks inevitable and we are faced with the prospect of an old crop market that will need to trade at a discount to new crop for the rest of the year.

One piece of information that could lend some support to prices are reports of frost damage to rapeseed crops in France, Germany and Poland. But that is seen as a limited factor.


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