YOU HARDLY need me to to tell you that this year’s harvest is turning into a very stop start affair, with wet weather holding up progress significantly during the second half of August and causing the crops to deteriorate, thereby losing quality as well.

The AHDB produced its third harvest report in mid-August and at that time 59% of the GB wheat crop was estimated to have been cut. During that week, the weather turned wet but despite the poorer weather later that week, the wheat harvest was 27% ahead of 2019 and 10% ahead of 2017, but behind the 2018 harvest.

The Scottish wheat harvest was at that time up to 21% complete and GB wheat yields were somewhere between 7.3-7.7t/ha. Hagbergs on wheat milling varieties have been over 275, with proteins at 12-14% and specific weights at 74-79kg/hl.

Winter barley harvest was complete with yields ranging from 6.3-6.6 t/ha and spring barley was 19% done, with yields averaging 5.8 t/ha. Nitrogen levels have been variable ranging from 1.3% in Scotland to 1.9% in the East of England.

The winter oilseed rape harvest, as of August 18, was more or less complete, with yield estimates between 2.6-3.0 t/ha, which is well below the five-year average of 3.5t/ha. Oil content was averaging 44% and oats were 24% complete.

Straw yields are lower than in recent years with wheat and winter barley yields typically ranging from 2.0-4.2 t/ha and the small area of spring barley cut before the weather broke had a straw yield estimated at 1.5-3.0 t/ha.

The English wheat area as of June, 2020, is provisionally 24% smaller than in June, 2019 – winter barley is down 35% and winter oilseed back 32%. The drops in winter crop areas from last year are due to the wet autumn weather at planting time and a difficult spring with long spells of dry weather and will see England’s smallest wheat and oilseed crop in many years.

High maize imports will be a feature of the UK market this year because of the small wheat crop and competitive maize prices. The UK will also have a large crop of oats and spring barley competing against maize for animal feed demand and the barley will be in a competitive overseas market for exports.

Now that more than 50% of the wheat area has been cut, the UK is expecting a 10-10.3m tonne crop this year based on estimated yields and a shortage of farmer selling is pushing premiums to futures prices higher in order for merchants to meet their contracted commitments.

In England, delivered feed wheat premiums for November, 2020, extended to £4.35 over November, 2020, futures recently. At the same date in 2012, the delivered premium for south of England wheat for November delivery that year was 90p/tonne under the November, 2012, feed wheat futures. Currently, November, 2020, liffee feed wheat futures stand at £169 per tonne; May, 2021, at £173; November, 2021, at £152.45; and for November, 2022, are down to £146.95 per tonne.

Ex-farm purchases of feed wheat in all positions are at the bottom end of the 10-year range. The total volume of purchases so far this season stands at 445,500 tonnes as of August 20, which is 23,600 tonnes behind the same time in 2012-13. That said, China has been buying large quantities of wheat and France officially sold 700,000 tonnes since July 1, and reputed to be up to 1m tonnes by now.

The Chicago Board of Trade wheat futures rose by 10% in value in August when the US announced wheat export sales of 740,000 tonnes and a further 747,000 tonnes of maize were sold to China. That caused maize futures to rise 12% in the past three weeks and a further 140,000 tonnes were sold to other destinations as well.

Following recent increases in the value of maize, the EU removed the tariffs on maize imports into the EU. The previous tariff was reduced to €0.28 per tonne on August 26, having been set at €5.48 on August 12. This is because the EU operates a floating tariff system for maize which responds to changes in market value.

Pakistan has tendered to buy up to 1.5m tonnes of wheat and the cheapest offer it received was £148 per tonne and this puts into perspective the current UK ex-farm feed wheat values, compared to world market prices.

The International Grains Council published its latest world wheat and maize production estimates which were both up on previous totals, with maize production now put at a record 1.166bn tonnes, wheat at 763m tonnes and total grain production at 2230m tonnes.

The wheat increase was due to more wheat from Russia at 79.9m tonnes and Australia up to 27.5m tonnes, France wheat production was down to 31m tonnes and Romania down to 5.6m tonnes.

The EU wheat production is now reduced to 113.5m tonnes and the UK wheat crop this year is expected to be the smallest since 1982 and potentially even lower than that and this will see wheat prices pegged back to what imported wheat to the UK will be worth.

It was thought that the price of imported maize would put a cap on wheat prices, but the recent violent hurricane storms that did a lot of damage in the US to maize crops pushed maize values higher. So, US maize crop condition scores have been downgraded and are now below the levels of 2018.

In Iowa, which usually produces about 18% of the US maize crop, after the severe storm on August 10, its crop potential dropped from 69% to 50% and is now the lowest since 2013.

However, global maize production is still forecast to reach 2,231m tonnes in 2021, nearly 61m tonnes more than in 2019-20 and over two-thirds of this increase at 42m tonnes is due to the forecast increase in US maize production. So maize is still likely to play a big part in UK grain pricing due to the small UK wheat crop.

Earlier this year, when Covid-19 appeared in March and subsequent panic buying took place in the shops, a lot of commodities became scarce, including flour and a lot of prices went up as a result. One commodity that did not was bread and in 2020, falling bread prices have been a part of the reason that inflation has been going down.

In the 12 weeks prior to January, 2020, the average bread price was £1.44/kg and in the 12 weeks following, inflation had reduced to 1% as bread prices dropped to £1.40/kg. Wheat prices have a more direct impact on flour, but the bakery process which includes ingredients ,packaging, marketing, and transport means that wheat is not really directly related to the price of bread and the value of wheat in an 800gm loaf of bread accounts for only 11% of the cost.

UK barley exports are continuing to the EU, but at a far slower pace than in 2019. Exports have generally been limited to Holland and not to the normal outlets of Spain and Portugal, due to both those countries producing a much larger crop of their own this year.

With a larger percentage of malting barley failing to make malting grade, the size of the UK’s surplus of feed barley is growing by the day. With uncertainty about trade agreements and potential tariffs post-Brexit, the UK will need to have an active export campaign in place before then.

Oilseed markets have been well supported by a combination of rising food demand as economies emerge from lockdown, plus sustained Chinese buying. It is believed to have bought 15.5m tonnes of new soyabean crop from the US, with a further 2.5m tonnes of sales made in recent days.

A larger tonnage of rapeseed, amounting to 6m tonnes will need to be imported to the EU and UK, but there are worries about the reducing availability of rapeseed from the Ukraine, where the expected tonnage was lowered yet again. The EU will have to turn to Australia for supplies where they are on course to produce a large tonnage from the 2020 harvest following recent widespread rain.

Rapeseed markets have recovered well in recent months since the Covid-19 outbreak, with post-lockdown oil crush volumes increasing and European crop tonnage reducing and this has seen oilseed rape delivered Erith for November, 2020, being quoted at £348 per tonne, an increase of £2.50 on the week.