THE 103mm or four inches of rain that fell in February – including some falls of snow – mirrored the 103.4mm of rain that fell in January.

In February, though, we experienced some extremes of weather. We had temperatures down to -23°C and as high as +18°C, coupled with a spell of extremely cold weather which saw water pipes freezing and a spell of continuous rain.

Now that March has arrived like a lamb and winter is officially over, fields have been drying in recent days with surface water not as evident and some fertiliser applicators are now out and about. In the next few weeks, no doubt grain drills will be back in action.

We have not heard so much about Brexit recently and with the Covid-19 vaccine rollout progressing well, there are some positive signs of recovery. There is hope that we will get back to some sort of normality where we will once again see restaurants and pubs begin to open and giving another kick-start to agricultural produce sales.

Unlike most other grains, Covid-19 restrictions have been good for oats. More people have been eating breakfast at home, pushing up the retail sales value of breakfast cereals, including muesli and granola.

People may, or may not keep their new breakfast habits after restrictions are eased, but if they do it will be positive for the oat and breakfast cereal industries in the future.

In the first half of this season, from July to December, 275,000 tonnes of oats were milled in the UK – 3% more than in the same period in 2019-20. This was despite the better quality of the 2020 crop which reduces the amount of oats needed for the same volume of finished product.

Higher exports of oat products, such as oat flakes, supported this volume. Between July and December, 2020, the UK exported 49,000 tonnes of oat flakes, compared to 26,000 tonnes for the same period in 2019.

Last season, high exports were a key part of reducing the carry over, but this season exports are far lower. By the end of December, unprocessed oat exports totalled some 23,000 tonnes, compared to 80,000 tonnes in the first half of 2019-20.

Any carry over will be important, as a bigger planted area is expected for harvest 2021. The AHDB Ealy Bird Survey indicated that the UK oat area could rise a further 2% to 214,000 ha as the oilseed rape area reduces, so we could be looking at a third successive 1m tonne oat crop.

There is also a strong incentive to use oats in animal feed. Ex-farm feed oat prices in January averaged £124.10 and this was £78.30 per tonne less than the average for feed wheat and £26.50 per tonne less than for feed barley.

In the last two weeks, the gap between ex-farm feed oat and feed barley prices was quoted even wider at £35.30 per tonne and the premium between feed wheat and feed barley in January was £53.50 per tonne.

So far this season, 36,000 tonnes of oats have been used in compound feed – up 7000 tonnes on the same period last year.

Defra confirmed that the 2020 UK oat crop, at 1.03m tonnes, is 15,000 tonnes higher than a previous estimate. Although the crop is 45,000 tonnes smaller than in 2019, it is still 148,000 tonnes above the 2015-19 average.

Due to this bigger tonnage ex-farm oats have not risen anywhere near as much as for feed wheat and barley since last autumn.

Feed barley prices have found support this week on the back of firmer old crop grain markets in both the UK and EU. Domestic demand remains strong for feed crop and is likely to remain so through to new crop as it is expected to maintaining its considerable discount to wheat.

AHDB recently increased estimates of animal feed usage of barley to more than 5.3m tonnes for crop 2020 and this has resulted in the fall of feed wheat used in rations. As a result of the increased premium of wheat over other feed grains, we have seen a large reduction in the consumption of wheat in animal feed in 2020-21 at just 12.62m tonnes, or 1.5m tonnes down on last season.

The strength of sterling is also weighing on barley markets. The pound is up almost 6% against the euro from January 1 and this is due to the rollout of the Covid-19 vaccine and possible earlier re-opening of the UK economy.

Sterling, then, has not helped our competitiveness to export, but they still exist, with both Tunisia and Algeria purchasing 275,000 tonnes of barley between them in the last two weeks.

The UK’s demand for human and industrial usage is now put at 6.438m tonnes, which is nearly 500,000 tonnes lower than last season. This is due to a huge 2m tonne cut in domestic wheat consumption.

Partly, this is due to the loss of demand for biofuel and starch due to the closure of the Roquette plant, in Corby, in December, as well as a reduction of feed wheat in animal rations.

Wheat imports have doubled on the year to 2.1m tonnes, but the small wheat harvest last year – amounting to 9.658m tonnes – meant that total supply was 5m tonnes down on the year. This has resulted in an exceptionally tight wheat situation ahead of the 2021 harvest.

However, weather and politics have helped to lift wheat prices this past week. Extreme cold across the US wheat producing states is affecting crops and the same can be said for the Black Sea region where a lack of snow cover and cold conditions are giving concern for their crops.

This resulted in May, 2021, old crop wheat futures up £2.25 on the week to £206.50, November, 2021, new crop up £2.10 to £171.10 per tonne, and both are up again at the beginning of this week.

Wheat prices got a lift last week when the UK government announced that UK grain was going to be used in bioethanol production which would increase renewable fuels in petrol blends from September, 2021.

Currently, petrol contains 5% bioethanol known as E5 but this will increase to 10% to be known as E10. This fuel is set to be compatible with 95% of petrol vehicles on the road and all petrol cars manufactured since 2011.

E10 is a blend of up to 10% renewable ethanol with petrol and is reported to reduce carbon dioxide emissions by 750,000 tonnes per year, which equates to 350,000 fewer cars on the road.

The new E10 fuel is to be made from low grade grains, sugars, and waste wood that is produced and refined in the UK.

Biofuel plants already running. Ensus is set for increased production and the Vivergo plant, in Hull, will re-open again in early 2022 having been closed for three years.

Historically, UK ethanol production has used up to 1m tonnes of wheat annually and with wheat use for animal feed likely to increase again next winter, the domestic supply and demand situation looks again to be tight.

There is still uncertainty about the 2021 wheat crop size. AHDB indicated that the area may rise by 28% from 2020 to 1.78m ha for harvest 2021 and this would be in line with the 2016-2020 average.

But with yields ranging from an average 7.0t/ha in 2020 to 8.9t/ha in 2019, total production could vary dramatically depending on the yield outcome – which is mainly down to the weather.

As mentioned, sterling firmed against the euro by nearly 6% since early January and this is the only negative factor associated with domestic oilseed rape prices, yet old crop farm prices have risen by more than £40 per tonne during this time.

Prices have also been helped by non-stop Chinese buying of almost all commodities, as well as concerns for oilseed crops in South America, low stock levels especially in the US and a supply deficit in the EU.

The dominant oilseed in global trading is soyabeans and the US accounts for 36% of its global exports. This year, US farmers will plant a record breaking 37.2m ha of maize and 36.4m ha of soya and this would normally equate to 360.3m tonnes of maize and 112.6m tonnes of soya.

Currently, the US stocks-to-use ratio is low at 2.6% and will only rise to around 3.2% at the end of next season with their record planted ha, as their soya stocks will only slightly increase from 3.27m tonnes up to 3.95m tonnes because of low opening stocks and strong demand.

Nearer home, the AHDB Early Bird Survey showed that the area of pulses is set to increase by 7% to 249,000 ha and this area is set to replace oilseed rape, which has been decreasing in recent years.

In December, the premium of feed beans over feed wheat had dropped to £25.06 per tonne, down from £41.03 last year. That was the lowest since 2018, due to the large availability of beans relative to the tight wheat supply available.

Interestingly, the year-to-December inclusion of feed beans in animal feed rations was up 22% on 2019-20 at 40,000 tonnes.

With the easing of measures enabling schools to re-open in the UK and school lunches resuming, this should help to ease the pressure on potato markets. In 2019-20, the average price of ware was £179 per tonne, down from £199 in 2018-19.

With potato planting coming round again soon, some growers will be considering a reduction in their planted area and figures released indicate that the UK area planted could be down 2% from last year to 115,600 ha.

The average price is currently around £168 per tonne, which is down £11 from last year.

GB grower held potato stocks as at the end of January sit at 2.11m tonnes, or 39% of total production. While this is 47,400 tonnes lower than in January, 2020, it is 40,860 tonnes higher than the five-year average.

These stock figures do not account for potatoes held by packers, processors, and merchants etc, and only represent what is on-farm at the end of January.

Scotland accounted for 29%, or 608,700 tonnes of what remained in grower ownership at that time and this represents almost half of total Scottish potato production still in store.

While there was a slight uplift in production in Scotland, much of our area is grown for seed production and slower seed sales may account for some of this volume.