There was enough good weather here in the Borders area in the latter half of July to get most of the winter barley harvest done – low moistures, but lower yields and less straw appear to be a feature, as well as high nitrogen levels for barley destined for malting.

Oilseed rape is now being cut and although the pods have been ready, the stems in many cases are taking longer to die off probably due to late rain following a dry spring, which is also why nitrogen levels have been high in winter barley crops.

The Lochton rainfall records from near Coldstream tell me that 74.9mm, or nearly 3 inches of rain fell in July, which is 1mm more than the 73.9mm that fell in June, to give a total for the year to date of 334.6mm, or just over 13 inches so far. The recent rain will be ideal for getting moist seedbeds for new sown crops and get them off to a good start for the coming season.

Last week, we saw the third highest temperature ever recorded in England and Met Office figures tell us that the 2019s average temperature was 1.1°C above the long-term 1961-1990 levels.The most recent decade has been 0.9°C warmer across the UK than the 1961-1990 average.

Last year, also saw the UK recording its hottest temperature as well at 38.7°C but it is not just summer temperature records that are being set as a new winter record of 21.2°C was set in February as well. A new December record of 18.7°C was set in Sutherland and a new record for the mildest day minimum temperature for February was set when temperatures did not dip below 13.9°C in Achnagart weather station, in the Highlands.

Incidentally, all of the 10 warmest years in the UK dating back to 1884 have occurred since 2002 and interestingly no cold temperature records were set last year. To find a year as the most recent coldest year, we have to go back to 1963 – more than 50 years ago. Could farmers looking to diversify into a new venture do worse than investigate the potential of vineyards on the southern slopes of the river Tweed?

Having said all that, this summer is the coldest for five years. The average temperature from June 1 to July 23 was 0.3°C below normal at 12.3°C. That said, from this weekend temperatures are due to reach 26°C and the forecast is for a 10-day warm spell due to a 700 mile-wide African heat flare which will be ideal for harvest to progress and keep drying costs to a minimum.

The first AHDB harvest progress report of 2020 stated that up to July 28, 56% of winter barley had been cut and yields have averaged around 6.4-6.8t/ha, or 4-10% below the five-year average of 7.1t/ha. Most samples had low screenings and high nitrogen levels and so instead of getting a malting premium are heading for the feed heap and worth around £120 per tonne for export.

Feed barley prices are around £40 per tonne below feed wheat and the UK will need to export barley onto the world market as there is going to be a lot of spring barley looking for a home. Currently, the malting barley market remains quiet with the reduced demand due to Covid-19, resulting in additional carryover stocks of malting barley in both UK and Europe. So, it will be crucial to export as much barley as possible.

UK barley is the cheapest in the EU but demand is limited due to the large crops in Spain and Ireland, which is where a large percentage of UK feed barley in past years has normally found a home.

The UK wheat harvest has started in the south of England but too soon to get any meaningful results so far, but 'average' is be expected.

The Liffee November, 2020, feed wheat futures were back last week to around £3 to £165.50 but have eased back again at the beginning of this week to £164.10 per tonne and May, 2021, futures are currently worth £169 per tonne. November 2021 futures stand at £150.25 and for November, 2022, worth £134.70 per tonne.

Recently, the International Grains Council cut 5.6m tonnes from its 2020-21 global wheat production forecast. At 762m tonnes, the global wheat crop would still be 12.1m tonnes above expected world demand but down on last month’s forecast surplus of 16.2m tonnes.

This is partly due to the EU wheat production now forecast at being 123.8m tonnes, compared to 147m tonnes last year, the US down to 49.6m tonnes and Argentina down to 20.4m tonnes. Ukraine has harvested around 55% of its wheat crop and average yield is 3.62 t/ha, compared to 3.82 t/ha last year, so wheat production there will be around 24.3m tonnes, compared to 28.5 m tonnes last year.

Russia is expecting a larger wheat crop, now put at 79.5m tonnes and Australia’s wheat output is now forecast at 26.7m tonnes, which would be 75% up on last year. China is forecasting a wheat production increase of 8m tonnes year-on-year and India will be up 4.4m tonnes, but as these last two countries will have minimal involvement in wheat exports, these extra stocks will not be available to the wider market.

The smaller available surplus gives the potential for greater volatility in prices and if harvest produces better or worse yields than forecast then it will increase the UK’s reliance on Southern Hemisphere harvests later on.

With the EU producing a lower amount of wheat, UK imports will be sourced from Canada for high protein wheat and in the last five years it has exported an average of 342,000 tonnes per year to the UK. Already this season, as of July 26, the UK has imported 73,760 tonnes of non-EU wheat, most of which has come from Canada and the rest from Russia.

In 2018-19, we imported an estimated 1.85m tonnes of wheat, of which around 500,000 tonnes came from Romania, but this country is suffering from drought which will reduce output by 3m tonnes down to 7m tonnes. At that time, the two UK bioethanol plants imported large tonnages of feed wheat and this year they are not operating, so that obviously reduces the UK wheat requirement.

UK prices need to stay high compared to world levels to attract imports because of the expected small UK wheat crop of less than 10m tonnes. Current prices are already at or close to these levels, but a lot depends on what happens in the wider world and the strength of sterling which currently stands at £1 equating to €1.1112.

Our winter oilseed rape crop harvest is half complete and is averaging 2.5-2.9 t/ha according to the AHDB harvest report. That's around 15-30% below the five-year average of 3.5 t/ha. Some crops in the South of England have been very poor due to cabbage stem flea beetle damage and some are saying this could be their last year for this crop.

Prices in the UK have risen by about £10 during July but eased at the beginning of August as sterling strengthened against the euro by 1.33%. Currently, OSR delivered Erith for November is worth £351 per tonne.

The EU rapeseed crop is estimated at 16.79 tonnes, increasing recently due to better weather in Poland and Lithuania, but the EU will still require to import a record 6.1m tonnes during the 2020-21 season. Some will come later in the year from Canada and Australia, with both expecting large crops.

The world’s production of all oilseeds in 2020-21 is expected to rise by over 29m tonnes and stocks likely to increase by approximately 6m tonnes by the end of the season, mainly due to a much bigger soyabean and sunflower crops for the third year running. These will put a ceiling on domestic prices.

The market, however, is supported by reports of substantial Chinese orders for soya and sales to there are at a six-year high. But with the ongoing trade issues between China and the US, there are no certainties that orders will convert into physical deliveries.