We have had some extremely hot, dry, and sunny weather recently and this is set to continue for the next week or so which will bring on harvest a bit more quickly than thought a few weeks ago.

Winter barley has been sprayed off over the past 10 days so combines will be on the move here in the Borders very soon. They are harvesting in the south of England and in France, where their early cut wheat crops were reported to have above average yields, but lower-than-average specific weight of 76kg/hl and higher protein than average at 13.5-14%. There are quality concerns as rain persists which is delaying their harvest, but at present their crop condition figures are much better than what they were at this time last year.

As has become the norm, global weather issues are causing much price volatility and over the past week the November 2021 new crop futures have risen by £12.55 per tonne or 7.5% to £178.40. Likewise, May 2022 wheat futures have gone from £172.50 up to £183.45 per tonne which maintains the spread between November 2021 and May 2022 at £5.00 per tonne. The Chicago Board of Trade wheat futures also saw a gain of 10% in value from last week’s three-month lows and also an increase in Paris milling wheat futures where the French wheat crop has been affected by wet weather which has reduced their good to excellent crop condition from 79% down to 76%. Weather in the US has been a key factor for prices over the past few months with the northern plains in particular feeling the effects of hot, dry weather which has been the worst since 2012-13, although not all in the same area. This has resulted in the US spring wheat crop being reported with only 16% as in good to excellent condition but the poor to very poor crop rating rose by 5% to 55%. The USDA cut its spring crop estimate by 41% on last year and is set to be the lowest since 1988 and 39% below the five-year average, and as a result has cut its total 2021 US wheat production by 4m tonnes from its June estimate to 47.52m tonnes which is 2m tonnes below last year. Russia is looking at reduced wheat yields following a dry autumn in 2020 and recent rain in Southern Russia has not been enough to see a recovery in yields there. As of July 13, around 13% of the Russian wheat area has been harvested and the average yield from that area was 3.4t/ha but recent rain over the last 14 days has delayed their harvest. Even with their reduced wheat production this year, Russia is once more set to be the biggest global exporter of wheat even though they have their own export restrictions in place and their production is now forecast down by 2.3m tonnes to 82.3m tonnes. Their spring wheat crop also has issues which is resulting in poorer crop condition than at this time last year.

The USDA published its most recent report stating that world wheat production was cut by 2m tonnes to 792.4m tonnes, which would still be 16.6m tonnes up on last year. However, increased demand from this season will reduce stocks and in turn, end stocks for 2021-22 are now forecast down by 5m tonnes from last month to 291.68m tonnes.

Canada is suffering as well from hot, dry weather and is looking at a reduction of 500,000 tonnes of wheat and the reduced availability of both Canadian and US high protein wheat may have price issues for the UK. Romania is bucking the trend by expecting a bumper wheat harvest of over 9m tonnes, which is up by almost 3m tonnes year-on-year, and this is contributing to the extra 1.9m tonnes of wheat from the EU-27’s total of 133m tonnes which is 14m tonnes up on last year.

The AHDB published its UK wheat planting and variety survey recently which estimates the UK area for the 2021 harvest will be 1.742m ha, which is 26% up on the previous year. The biggest rise in planting is in the East Midlands and is up 47% on last year. Of the wheat drilled, the survey sees 29% of the area as Group 1 and 12% as group 2 – if this is correct, it would lead to a significant oversupply of bread-making wheat for the UK domestic market and make it difficult for growers to achieve a premium for high protein samples.

653,000ha or nearly 40% of the total UK wheat growing area this year is in the East and South-East of England and there will be a premium price paid for delivery up to the North of England where wheat will be required for the two bioethanol plants situated there to produce E10 fuel which will be required soon.

The latest maize crop condition report increased good to excellent ratings for US maize due to rain arriving in many states, although initial yield estimates by US growers indicate below 8-year averages and the 2020-21 Brazilian maize production has been reduced by 5.5m tonnes to 93.0m tonnes. The 2021-22 US maize production estimate has been increased by 4.5m tonnes to 385.21m tonnes, China are forecasting an increased maize production but have kept their maize imports at 26.0m tonnes.

The barley harvest in the UK is now well underway in England and is about 10-14 days later than last year’s early harvest. The premium for old crop versus new crop has been put as high as £50.00 per tonne due to tight old crop supplies but that will soon disappear when additional new crop comes onto the market. There has been an increased interest in new crop exports for the harvest period mainly from Southern Europe, and barley prices in general have firmed following the recent rise in the price of wheat.

The AHDB published the UK barley crop production estimates last week which was put at 7.24m tonnes and puts production well down on what was an exceptionally large barley crop in the UK last year due to the previous poor autumn planting season resulting in a big spring barley area. This year the UK spring barley area is down 28% from 2020 at 769,000ha and the winter barley area is up 15% from 2020 at 350,000ha, resulting in a decrease of 18% of planted barley area from last year.

The largest reduction in spring barley, amounting to 49%, is in the East Midlands, followed by a 42% reduction in Yorkshire and Humber area, in Scotland there is a marginal reduction of 27,000 ha and the total Scottish winter barley area is estimated at 232,000ha. 

There has been an 88% increase or 46,000 ha this year in winter barley in the East Midlands, a decrease of 8% in the North and West of England, a 12% reduction in planted area in the South-East of England, compared to Scotland which is down by only 3%.

Due to a large barley area in 2020, this saw the barley market command a large price discount to wheat and currently this discount stands at around £19.00 per tonne where feed wheat delivered East Anglia is currently quoted at £173.00 per tonne.

Overall, 58% of the total GB barley area is grown to produce malting barley and this is a significant decrease from the 74% grown in 2020 as growers have moved away from malting barley varieties. Laureate is the most popular variety and accounts for 26%, while RGT-Planet is second accounting for 20% of the total area.

The total area for oats in GB is estimated at 211,000 ha, which is a 1% increase year-on-year, and the area is limited after last year’s increased planting and extra tonnage which put pressure on prices. The East Midlands area is down by 22% and the East of England has increased its area by 28%, as growers move away from alternative break crops such as oilseed rape due to growing issues.

In most areas of the UK, the bean crop is looking well with little evidence of disease, due to ideal growing conditions with pea and bean yields expected to be 25-30% better than last year – prices have tended to follow wheat, but very little trade is being done at present.

The USDA earlier this week released its world supply and demand estimates and world 2021-22 oilseeds supply increased by 6.08m tonnes this month to 740.4m tonnes, increasing ending stocks by 2.31m tonnes. Global 2021-22 soybean ending stocks increased by 1.94m tonnes to 94.49m tonnes due to reduced Chinese imports.

Europe is predicted to have a similar supply position to 2020-21, given a bigger crop but lower opening stocks. Australia is currently benefitting from higher plantings and reasonable weather, but the Ukraine is looking to its smallest crop in four years due to a 13% decline in plantings due to exceptionally dry conditions last autumn. The area for oilseed rape in the UK is estimOKated at 322,000ha which is down 15% year-on-year, and due to significant pest pressure last year, growers reduced their planted area where cabbage Stem Flea beetle is prevalent.