For the first four months of this year, we have had 129.6mm or just more than five-inches of rain here in the Borders having had 24.3mm in April – the total for the year to date is half what we had in the same time last year.

This dry weather is being replicated in many parts of the world where crops are grown and if we take a quick look round, we find India – which had been expecting a record wheat crop of up to 111.3m tonnes (a fifth year of record production) has now cut its forecast to 105m tonnes due to severe heat and drought during the second half of March.

There is talk of restricting exports but India is still hoping to export around 8m tonnes of wheat. Some of that is now destined to be sent to Egypt, the world’s largest wheat importer.

Canada has also suffered recently from drought and this resulted in field crop stocks down by 38.7% for wheat as at the end of March, 2022, compared to March, 2021. It's also down 43.7% for barley and 48.6% for oats.

Drought concerns in parts of the EU has seen French winter wheat crop ratings slipped down to 89% 'good to excellent' but though still ahead of last year when ratings stood at 79%.

In the US, there are hopes that crop planting can progress as some rain is forecast, though for many areas, rainfall will be below average. For Brazil, conditions remain warm and dry across much of the maize growing region, but rain is expected later in the month.

Rain is also required for spring barley crops planted earlier in the southern half of the UK where little rain has fallen since planting and this is pushing up futures prices even further.

UK old crop feed wheat futures for May, 2022, contract reached a record high last week, closing at £340.25 per tonne, but eased back by the end of the week to £335 – that was still up £5.50 on the week. November, 2022, new crop futures were up £19.60 on the week closing at £318.75 last week, but this week currently sit at £325.50 per tonne.

UK delivered prices remain supported by tight global supplies and last week old crop feed wheat in the south of England for July delivery was quoted at £336 per tonne and new crop feed wheat for harvest delivery was worth £311 per tonne. Bread wheat into the North-west of England for November delivery was quoted at £380.50.

As at the end of February, 3.85m tonnes of wheat were stored on farm in England and Wales, which is 45% up on the year. Total wheat stocks held by merchants, ports and co-ops at the end of February was 1.28m tonnes, or 12% down on last year.

On farm barley stocks stood at 767,000 tonnes, down 35% on the year and the amount being held by merchants, ports, and co-ops at 786,000 tonnes, also 18% down on last year.

As it has been for some months, the primary price driver for the world’s wheat markets has been the impact on supplies resulting from the war in Ukraine, though potential wheat supplies from other countries are being affected by weather.

The US winter wheat crop is having its lowest crop condition rating since 1989, and spring wheat and maize planting are behind schedule due to cold wet conditions at 19% and 14% planted, respectively, compared to 46% and 42% last year.

Argentina is reporting an expected reduced wheat crop, down from 21.9m tonnes to 18.6m tonnes because of rising fuel and fertiliser costs and will result in exports down from 15.3m tonnes to 12.6m tonnes which all adds to the global issues of supply and demand.

Australia is also expected to have a lower wheat output from last tear's record yield of 36.3m tonnes, now estimated at 29m tonnes, resulting in exportable surplus down by 5m tonnes to 22m tonnes.

Due to the ongoing conflict with Russia, the Ukraine has planted 6.1m ha of spring grain from a planned spring grain area of 11.45m, with farmers having to deal with military issues on the land, including fuel shortages.

Ukraine is still expecting to harvest a grain crop of 41.4m tonnes, which includes 17m tonnes of wheat, compared to 33m tonnes in 2021 and 18.5m tonnes of maize, compared to 42m tonnes last year. Forecasts of 33.2m tonnes of grain exports will depend on what export facilities are in operation, including the railway system.

Russia is expecting a big 2022 wheat crop and is working its way around sanctions and getting a significant amount of global demand by exporting from the Russian side of the Black Sea and from the Azov Sea.

Last month, we saw oilseed rape prices rise to record levels as Canada reduced their canola area down to 20.9m ha, which would be a 71% drop compared to last year. This resulted in prices rising for a 12th week in a row and at the same time the EU reduced its 2022 predicted yield down from 3.33 tonnes per ha to 3.19 tonnes per ha.

Earlier this month, we saw oilseed rape prices ease as EU member states imposed changes to the biofuel mandates which would lower the minimum volume of biofuels needed in fuel blends which significantly reduced demand for rapeseed. This saw delivered oilseed rape to Erith for November, 2022, drop by £29 to £719 per tonne.

Prices will no doubt be supported by the lower canola stocks in Canada, where stocks of 3.9m tonnes are down 49% from March, 2021, and 64% from March, 2020. Looking to the future, Canada is set to add 6.8m tonnes of oilseed rape crushing capacity by 2025 – a 62% increase on current capacity.

For the UK, it would appear that the 2021-22 harvest season is going to finish with tight stocks again, which was going to be the case even before the Russia-Ukraine war broke out.

Weather issues will be one of the main reasons for tighter supplies and looking to harvest 2022, the UK wheat area is projected to be up 1% at 1.805m ha. Total barley area is expected to be down by 4% at just over 1.1m ha.

As always, though, yield will be dictated by the weather between now and harvest and some areas of the UK need rain to help get the crops to grow and we also must consider the high cost of fertiliser which may see yields reduced if less than normal applications are done.

Given the past average five-year yield for UK wheat, a crop of more than 14m tonnes is achievable and for barley a 7m tonne crop is likely. New crop barley prices have firmed over the past week, following the global wheat markets.

Fertiliser prices appear to have settled for the moment with 33.5% ammonium nitrate being offered at around €775 per tonne in Europe. There has been an increase in triple super phosphate from £755 up to £860 per tonne as natural gas futures trade at 242p/therm compared to July prices of 184p/therm. This would indicate that fertiliser prices are likely to increase again later this year.

Gas oil and kerosene prices are up 76% and 129%, respectively, since harvest last year, while wheat prices have not risen in line with that. For instance, delivered feed wheat into the south of England at the end of April is just 55.4% higher per tonne than at harvest time last year.

It is interesting to look back at the Liffe feed wheat futures on December 28, 2021, for May, 2022 contract, which stood at that time at £232 – it now stand at £335 – and for November, 2022, last December was at £202.70 and now at £325.50 per tonne.

Who would have thought these figures were possible less than five months later, or for that matter the increase in price of fuel, fertiliser and machinery!