With just 16.4mm of rain in March for my part of the Borders, this month has so far kept up the drying process.

It started with some very dry, cold wintry weather, keen frosts and low temperatures, which has resulted in spring growth coming to a standstill. The cold weather is forecast to carry on for some days yet and with no sign of any major falls of rain, spring sown crops are now looking hungry and in need of some heat and moisture.

Potato planting is continuing, but with frost at night and very low soil temperatures, it will take a big change in the weather to see any growth take place. This is not ideal potato planting conditions but if farmers wait for warmer temperatures to plant, then rain may come and forget to stop!

With schools and outdoor eating premises opening up again this week – at least south of the Border – we should see increased usage and demand for potatoes.

The packing trade until now has been quiet and supermarket demand is mainly for Maris Piper, although availability of best quality supplies appear hard to source. This has seen higher prices, which is also helped by farmers too busy on the land and not moving potatoes out of store.

Prices for Piper lower quality grade has increased from £150 to £195 and for best quality remained constant at £250 per tonne. Whites are up £10 to £40 for lower quality and unchanged at £80 for best samples.

Spring barley drilling is now more or less complete in many areas, going in to good seed beds. The AHDB's first update on winter barley conditions shows 62% of the crop rated as 'good to excellent', which is a 15% increase on this time last year.

Winter barley represents about one-third of the total barley area drilled in Scotland and this has seen new crop barley’s discount to wheat drop slightly to £15-£16 per tonne.

Currently, domestic demand for barley remains strong given barley’s discount to wheat and maize, and with a lack of grass and heat to turn out livestock, more feed rations will be required for some time yet. Looking forward, there is export interest for barley for the harvest period from southern Europe, but currently there is little interest.

Prices for oilseed rape have been volatile in recent weeks and have followed the trend set by soyabeans, with old crop prices ending down last week while new crop prices were up.

November, 2021, new crop rapeseed delivered Erith was reported at £391 per tonne last week which was £4.50 up on the previous week. March saw rapeseed prices with a £30 trading range on old crop markets but prices ended the month within a few pounds from where they started on March 1 but new crop prices have risen by £10 in the past month.

Something to keep an eye on going forward is the recent rise in sterling. On April 1, £1 was worth €1.11745 compared to €1.1556 on March 1. This strengthening of sterling is expected to continue in the short term and this means that even if global prices rise, UK prices may not rise as much.

A stronger sterling means exports become less price competitive and imports more so. As a result, we could see pressure on UK prices for crops we need to export, such as barley. There would also be less support for the prices of any crops we need to import.

Since the start of this season, the pound has strengthened by 6.2% against the euro and 11.8% against the dollar and in the past three months alone, the pound has strengthened by 5.9% against the euro.

The reasoning for the stronger pound is put down to the vaccine rollout success against other nations and the plans for easing restrictions, giving optimism that the UK economy will reopen quickly.

The 2021 EU 27 rapeseed crop is forecast to be 16.8m tonnes which is down from the 17.1m tonnes forecast last month, and this would keep EU oilseed rape supplies tight for next season and keep EU and UK rapeseed prices high compared to those for other oilseeds.

Most of the price volatility is based on the weather in South America, which has a direct effect on soyabean production. The Brazilian soya harvest is now 78% complete, which is behind the 83% at this time last year, but there is increasing confidence that their estimated production tonnage will be achieved.

US soya futures are on track for their first monthly loss since May, 2020, due to improving weather in South America and expectations of increased US planted area.

US farmers intend to plant 35.5m ha to soya this year, or 5% more than last year and this is due to higher prices. But even at that level, there are concerns that the US could produce a smaller crop than that required.

An issue which could affect prices, is China wanting to reduce the pace of soya imports from the US as it tries to cut back on the amount of soya meal and maize used in pig rations because of swine fever issues.

Another factor is prospects for the Australian canola harvest for later this year. Due to a combination of low stocks and known planted area in Canada and Ukraine, it is projected that availability will be reduced in 2021-22.

This puts more pressure on Australia to deliver at least what it did in 2020-21. It is not a reliable producer of canola due to unpredictable weather and as the EU is looking to take 2.5m tonnes and possibly even more, Australia is forecasting to produce 4.4m tonnes. Last year the total volume produced was only 2.3m tonnes and exports were less than half of this year’s projected figure.

On other proteins, old crop bean prices have continued to fall, with very little demand and are currently down £10 per tonne over the past week to around £210 for next month and could fall further.

New crop prices are below £200 ex farm and the price will reflect how the crop grows over the coming weeks, and peas are in a similar situation to beans with no demand, and again the new crop price will depend on how the crop fares over the next month or two.

On March 1, May, 2021, old crop wheat futures stood at £207 before falling to £190 per tonne on March 31, when oilseed rape fell by £8 on the same day. Wheat futures for May, 2021, have now recovered to £196 and for November, 2021, new crop futures currently stand at £167.50; May, 2022, are at £170.65; and November, 2022, is at £163.

A lack of demand for new wheat and generally good growing conditions in the Northern Hemisphere is the reason for the drop in prices.

That said, extreme drought has spread across key spring wheat producing states in the US compared to last year when there were no such issues and to date the USDA estimate that only 2% of spring wheat has been sown. This should be watched closely over the next few weeks.

The US winter wheat conditions are as expected, with 53% rated as 'good to excellent' but lower than the 62% last year at this time.

There are also concerns nearer to home, in France, where temperatures have dropped to record levels in April and their wheat rating was put at 87% 'good to excellent' compared to 62% last year at this time. Time will tell if the low temperatures have had any effect.

Although there were some weather issues during the autumn in 2020 in some countries, it was nowhere near the major problems that we saw in autumn, 2019. More than 90% of winter cereals were sown by the end of November and weather conditions so far during this growing season have been mainly good, with crops coming out of winter in much better condition than 2019/20.

By the end of March this year, it was estimated that 70% of the planned spring wheat area had been sown, as well as 40% of the planned spring barley.

Again, as at the end of March, 63% of the winter wheat crop was reckoned to be in 'good or excellent' condition, compared to just 49% the previous year. Likewise, 60% of winter barley was in that bracket opposed to 45% last year and oilseed rape was at 41%, compared to 37%.

At the end of March, the USDA published its quarterly US stock and acreage report which led to a sharp price rally for maize futures, which rose to their highest level since 2013.

This encouraged US farmers to significantly increase their maize acreage to estimates as high as 94m acres, compared to 90.8m planted the previous year, but has now been revised down to 91.14m acres. This would leave 2021 US maize production short of expected domestic and export demand.

Increasing Chinese demand for US maize, coupled with South American maize production has kept US maize futures close to contract highs.

Meanwhile, US domestic demand for ethanol production is continuing to increase and is now above the five-year average and there is the possibility of further Chinese old crop US maize purchases as well.

Prices are being supported by February US maize exports at 6.3m tonnes which is the highest monthly volume since July 2018, and March estimates are likely to have exceeded a record monthly total of 9m tonnes.

Heading into the new crop year, there looks to be another year of tight UK wheat supply versus demand. Global supply and demand are going to be crucial to UK wheat prices in the new season and traders will be watching for any latest global weather issues, and up to date planting figures that might cause more commodity price volatility like that we have been experiencing recently.