THE WEATHER has become more unsettled with some rain showers – but in some areas, like the Borders and the North-east, it’s not been enough to do much good.
However, other areas have been soaking it up and growth of grass and grain has been exceptional in just a few days. Tatties will need more moisture, though I did hear that Ayrshire earlies will come to the market two weeks earlier because of the sunshine we had in April and early May.
There is likely to be increased volatility in the market place, with weather concerns around the world for crops in the ground. It’s mainly about ongoing dry weather and the negative impact it may have on wheat yields is increasingly concerning. 
If 2017-18 UK wheat demand level is similar to this past season and with prospects of an average yield, the UK’s domestic balance sheet will be very tight. Fears over low yields have seen the Liffe November, 2017, wheat futures rise at one point by £2.50 to close the week at £143 per tonne, but they dropped £2 this week when rain appeared at last. 
New crop May, 2017, futures made marginal gains, up by just 30p to £149.60 and this means that the discount of new crop feed wheat futures to old crop UK feed wheat futures dropped down to £6.60 per tonne – the smallest discount recorded this calendar year.
The first USDA 2017-18 global supply and demand projections point to lower output and increased demand, resulting in lower closing stocks for most grains. This season, 2017-18 is forecast to be the first deficit year since 2012-13 and consumption is forecast around 24m tonnes higher than production, so the situation for 2017-18 is looking finely balanced.
Globally, wheat production is forecast 2% lower year-on-year at 737.8m tonnes – but that is still the second highest figure on record. 
However, total consumption is also expected to decline slightly, which would see closing stocks for next season 1.2% higher at a record 258.3m tonnes. The stocks to use ratio for wheat is projected at 35.1% in 2017-18 which would be up from 34.7% this season. If the global stocks to use ratio excluded China, then the ratio would fall to 21% which would be the lowest since 2007-08 as China is a non-exporting country. 
Figures for wheat show the EU up 5m tonnes, India up 10m tonnes, the US down 13m tonnes, the former Soviet Union down 9m tonnes and Australia down 10m tonnes. All these are major exporters.
Cumulative EU common wheat exports so far this season are 19% lower than the same point last year and up to May 10, season-to-date exports totalled 21.2m tonnes, compared to 26.3m tonnes on 2015-16. 
Looking ahead, there are dry weather concerns across the EU, potentially affecting key producing countries like France and other top EU exporting countries. This is one that traders will be monitoring closely over the next two months. 
The UK was a nett importer of wheat in March for the fourth month running. In March,168,500 tonnes came in and our exports for the same month were at their lowest monthly total since June, 2015, at 71,200 tonnes. 
On a cumulative basis, though, the UK is a nett exporter, with total exports at 1.32m tonnes and imports of 1.27m tonnes. But it is likely that once the figures for April are factored in, then the UK will be a nett importer on a cumulative basis, which is not surprising given tight stocks.
The UK barley market has been dominated as well by concerns about lack of rainfall this week. The market will be nervous until rain does come in effective amounts. 
UK malting barley prices have remained unchanged, despite European prices falling as a result of Scandinavian and French barley crops having a decent amount of rain. This means UK malting barley is currently at a premium to Danish.
Feed barley remains trading at a wide discount to feed wheat, for both old and new crop and prices for this harvest look to under pressure.
UK barley exports at the end of March totalled 890,000 tonnes, or well below the 1.55m tonnes exported last season.
UK ex-farm bread wheat was up 10p to £147.60 and feed wheat was down 90p to £145.30 – feed barley was down £2.30 to £120.30, or a £25.10 discount to wheat.
However, one chink of light for the big Scottish barley crop, is that world barley stocks will end next season at their lowest level in 34 years. USDA’s first forecast for 2017-18 expected barley stocks to fall after a five-year stock building process.
Global stocks are expected to close next season at just under 17.5m tonnes. That would be a 29% fall year-on-year and the lowest since 1983-84. 
World barley planting is expected to drop by 960,000ha to 47.2m ha making it the second lowest on US data going back to 1960.
China, in 2017-18. is going to cut its large maize stocks and will be helped by two years of lower planted area of maize. Maize stocks total 81.3m tonnes and accounted for 42% of the global total. 
At one time, China had 52% of global crop stocks, but its farmers will cut planting by 4.8% to a six-year low of 35m ha – down 20m tonnes from last year and the lowest since 2012-13.
Chinese maize consumption is also expected to rise by 6m tonnes year-on-year to a record 238m tonnes in the coming year.
UK maize imports up to the end of March totalled 1.41m tonnes compared to 1.37m tonnes last season. French maize planting is at its lowest for 25 years as poor yields have bumped farmers in to to other crops, like sugar beet.