The cold weather that we had in April continued throughout this month, but May has also seen a lot of heavy rain which has made up for the previous shortfall – what crops need now is some heat.

Potato plants have been slower than normal to emerge and the grain harvest is looking to be at least a week later than usual, but winter barley awns have been emerging this past week, so crops are moving forward at last.

We appear to be getting through the worst of the pandemic – apart from one or two hot spots – and this will help to get more people out and about which will see more meat and vegetables being consumed. This can only be good for all the businesses that have been under the cosh for the past 15 months.

One other concern that is a worry for farmers who produce food for the table is the possibility that tariff-free imports may come in from countries like Australia if some people in government get their way. This would not be fair to UK farmers who abide by the rules and regulations to produce food to a high and recognised standard, compared to some countries who do not conform in the same way.

Commodity markets have been very volatile recently. The see-saw meant that London wheat futures hit a low of £21.50 /tonne below their recent peak and the Chicago Board of Trade prices drop by 10% below their end of April high.

November, 2021, Liffe feed wheat futures on week ending May 7 were £192, on May 14 were £180.25, on the May 21 were at £175.10 and then were down again to £172.10 on May 25. May, 2022, futures on the 15th hit £192.25 and as I write they are currently down to £179.75 per tonne.

The decline in global grain markets has been a key driver for a fall in UK wheat prices, as were gains in the value of sterling against the euro and also the dollar, which has moved lower on weak economic data from the US and signals of support from the US Federal Reserve.

The November, 2022, futures also dropped and on May 19 closed at £164.50/tonne which is £8.25 below the contract’s peak price to date of £172.75 set on April 26, but at £164.50 this figure is still the third highest for any crop ahead of harvest, with the other prices higher for the 2012 and 2014 harvests, when they were at £170.50 and £166.15/tonne, respectively.

The prices for the 2012 and 2014 harvests were both high due to tight global supplies and farmers making plans for their 2022 harvest would, at these prices, plant more wheat but as always there are no guarantees where prices will be next year at harvest time.

The recent USDA report forecasts 2021-22 world wheat production rising by almost 13m tonnes to 788.98m tonnes. World wheat demand is seen increasing by 8m tonnes, with only 1.5m tonnes used for feed.

With high maize prices trading at a premium to milling wheat, it is expected that wheat use in feed rations will quickly increase. World stocks at the end of 2021-22 are predicted to be just 300,000 tonnes up on the year.

Defra on-farm stocks were released recently and in England and Wales 2.66m tonnes of wheat was still on farm in February, which was 41% up on that time last year. AHDB also released cereal stocks, estimating that 1.19m tonnes of home-grown wheat and 270,000 tonnes of imported wheat was being held by merchants, ports and co-ops in the UK. These figures were -7.4% and +40.4%, respectively, from last year.

The UK is expecting to produce 14.8m tonnes of wheat this year and the recent rain has improved the forecasted yield up to 8.1 tonnes per ha.

The EU is forecast to produce 129.6m tonnes of wheat, which would be 10.2m tonnes up on last year, mainly due to France's production expected to be up by 7m tonnes to 36.1m tonnes, with its crop is currently rated as 79% 'good to excellent', which is well ahead of the 55% rating at this time last year.

US prospects for its wheat crop has increased following the annual 'Kansas crop tour', which is looking at a record yield, but some states have still been exceptionally dry, and drilling is now 85% complete compared to 57% last year at this time, over half of the US winter wheat crop is now at ear emergence and so more sensitive to adverse weather.

Canada has reported their wheat planting at 74% complete, well ahead of the five-year average of 48% at this time of year.

UK trade data released recently showed that the UK imported 176,600 tonnes of wheat and 184,400 tonnes of maize in March, and this brings the total combined imports of maize and wheat to over 4m tonnes for the season to date.

Since the release of the recent USDA report, as reported earlier, both old and new crop global grain markets have lost ground and part of this drop has been driven by larger than expected estimates for both old and new crop maize.

For 2021-22, world maize production is forecast to rise by 61m tonnes to 1.189bn tonnes with the US maize crop 20.5m tonnes higher at 380.76m tonnes due to record breaking yields. Brazilian production is up 16m tonnes to 118m tonnes and Chinese production is up 8m tonnes to 268m tonnes.

Due to drought and prolonged hot weather in Brazil, its maize crop has been revised down from an earlier total of 109m tonnes down to 91.1m tonnes.

World demand is estimated to increase by 32m tonnes to 1.181bn tonnes and imports to China will total some 26m tonnes from the US during 2021-22 and is much higher than in 2019-20 when China imported just 7.6m tonnes and they have recently bought another 11m tonnes for next year. Ukraine is believed to have sold 4-6m tonnes to China as well and it is possible that China may well have bought up to 20m tonnes in advance from the crop that is just being planted.

US maize planting is now 80% complete, compared to the 68% average for this time of year, and around 95m acres of extra land is planned to be done. Meanwhile, China's 2021-22 maize plantings are up 3.4% to 42.67m ha and would see production up by 4.3% to 271.81m tonnes.

Feed barley prices have risen and fallen in line with wheat futures markets and the price discount to wheat is somewhere around £17-£22 per tonne. Grass has started to see some better growth now so there will be less demand for barley in feed rations, but it is now becoming harder to source.

New crop malting barley prices have also fallen as rain has seen some growth in the spring crop and helps to ensure that yields will be better than what was thought at the end of last month following the prolonged dry cold weather.

Fertiliser applied over recent months to grass and spring crops is now being taken up by the plants, and fertiliser prices remain firm and continue to increase as India requires to buy 1.2m tonnes of granular urea by the end of this month. Ammonium nitrate is in tight supply and prices have increased as a result – there is strong demand for urea also from both North and South America which is keeping urea prices firm.

Global oilseed supplies for 2021-22 are projected to increase by 3% from 2020-21 to 732.4m tonnes. Inflated prices throughout 2020-21 incentivised the expansion of the oilseed area. As a result, oilseed ending stocks in 2021-22 are expected to increase to 104.6m tonnes, up from 100.2m tonnes in 2020-21.

Many growers have turned away from OSR in recent years, due to difficult growing conditions and pest control issues being given as the reason for the decline, but positive net margins are still possible if reasonable yields can be achieved.

Tight supplies in the old crop market have supported prices to near record levels and this looks set to continue with another 6m-tonne import requirement for the EU next season. Prices did ease slightly mid-month, with the USDA report for new crop soyabean futures and delivered rapeseed, but old crop soya futures fared better due to a tighter supply balance with ending stocks in 2020-21 at 3.35m tonnes which is the lowest since 2013-14.

The USDA report increased global soyabean production by 23m tonnes and with prices recently hitting eight-year highs, this begs the question of whether the continued increasing high prices keep rising further?

The report indicated a rise in demand for biofuels in the US and the USDA is predicting that 47% of US bean oil in 2021-22 will be used for energy, which is a sharp increase from the current level of 34%. There are plans for a dozen new major biofuel plants in the US in the next three years, so there is likely to be a significant jump in domestic demand for US soybeans. If more land cannot be sourced for more beans, this will mean lower exports which, in turn, will force the Chinese to look elsewhere for supplies.

UK delivered rapeseed prices fell last week after successive weeks of gains. Delivered prices for November to Erith were quoted at £473 per tonne, down £4. Prices for harvest delivery were down £2.50 at £466.50/tonne.

Prices are currently sitting at over £100 per tonne above values three months ago, but £18 less than a week ago – but a collapse in prices seems unlikely as there is no escape from low year ending stocks for all global oilseeds. That said, on May 25 prices did fall again overnight by £6 per tonne – highlighting once again the volatility of the market.

Reports of rain in the central and southern US plains and throughout much of Europe, as well as rain in Australia, plus Indian soya planting up by 10% this year and Germany on course for a 3.1% increase in production, combined to relax the market price pressure.

However, production in Canada, a key supplier to Europe, remains a concern as severe drought is threatening germination and early crop development. Also, record demand in the first eight months of the season have left its canola (OSR) stocks at the lowest level since 2013, prompting fears that available export tonnage for August and September will be greatly reduced prior to their harvest, where Canada recently accounted for 35.1% of imports to the EU-27 this season up to the May 9.

Next season, Black Sea countries are forecast to harvest 6.25m tonnes of rapeseed, up 135,999 tonnes on 2020-21, due to better yield prospects for some of the other countries in the group with the rapeseed planted area unchanged, and the EU-27 will look to the Black Sea region to fulfil its 6.3m rapeseed import requirement.