Scotland has not seen the recent high temperatures experienced in the south of England recently, but forecasts are for some heat this week further north.

We have seen little rain this month and there are concerns for some water shortages coming soon at the same time as irrigators are busy now as well on some crops – with the East being drier than the West! There are signs now on the lighter land of stress due to lack of rain and if the weather does turn hot and dry then this will impact on yield.

Many countries in Europe are experiencing hot weather at their critical grain filling stage and the EU wheat crop potential tonnage has been reduced to 124.4m tonnes. The French wheat crop ratings have been downgraded again and now stand at 65% 'good to excellent', compared to 81% this time last year as temperatures hit 40°C temperatures recently.

Italy is expecting a 15% drop in wheat production as well as Spain due to the hot weather where their wheat harvest will be around 5m tonnes compared to more than 7.3m tonnes last year.

Russia is forecast to produce somewhere between 81 and 87m tonnes of wheat this year, which would be a record if realised and India is forecasting somewhere between 100-106m tonnes of wheat.

Australia is looking at a 2022-23 wheat crop of 30.3m tonnes which would be the fourth largest on record but well down on the 2021-22 crop which reached over 36m tonnes. Argentina is forecasting a lower tonnage, down from its record crop last year of 23m tonnes of wheat due to the dry weather reducing their planted area down to 6.6m ha which would be the lowest for 12 years.

Chicago wheat futures are under pressure as the US wheat harvest progresses with dry conditions on the Plains allowing harvest to progress quicker than normal and as at the June 12 their winter wheat harvest was 10% complete, but down from their five-year average of 12% at that time.

World 2022-23 wheat expectation was cut recently by 800,000 tonnes to a total of 773.43m tonnes and consumption was cut by 1.5m tonnes, leaving year-end stocks just 17,000 tonnes below last month at a total of 266.85m tonnes – this is 12.5m tonnes below this season’s ending stocks.

The UK is looking at a 15m-tonne wheat crop this year, but much will depend on the weather between now and harvest. Carryover stocks are currently estimated at 1.892m tonnes which is 34% higher than 2021-22 levels, so this could see total opening stocks and production for 2022-23 of around 16.9m tonnes – similar to levels recorded in 2019-20 at 18.1m tonnes and 2016-17 at 17.2m tonnes. This should lead to a higher availability of wheat domestically next season.

Even with a potential higher supply of wheat, UK wheat futures have risen slightly over this past week and May, 2023, is up £3.50 to £314.75 per tonne. November, 2022, futures were up £2 to £308 but later dropped by £4 per tonne. Physical prices for wheat in the south of England have risen again, with delivered wheat quoted at £306.50 – up £8 – and bread wheat was up £9 to £377 per tonne.

Delivered premiums in the North on average have been at their highest in comparison to the previous few years. At the beginning of February wheat for spot delivery reached £24.25 per tonne premium over nearby UK feed wheat futures. Demand in the north has been supported by the increased production of bioethanol in the area. New crop premiums, re November, 2022, futures are looking much lower than in 2021-22 at £9 per tonne.

Now that both bioethanol plants are operating again, spot prices for delivered wheat in the north have risen to an average of £15.64 over futures and this is likely to continue if both plants remain open but any increase in production because of the recent high prices could weaken this premium.

UK wheat imports up to 1 June 14 total 1.644m tonnes, which leaves a monthly average of 52,800 tonnes for May and June to reach the current full season wheat import forecast of 1.75m tonnes. Wheat exports in April were 54,500 tonnes and this is more than double the three-year average figure for April. In order to meet the current full season forecast of 530,000 tonnes, it would need an average monthly figure of 87,800 tonnes for the remaining May and June months.

It is estimated that that 20m tonnes of grain remain stuck in Ukraine raising concerns that millions of people might starve because Russia continues to blockade ports. But Ukraine has moved some tonnage and more than over 601,000 tonnes have been sent by rail and barge to the Romanian port of Constanta. Negotiations are going on to try and release more Ukrainian grain out of Odessa, with EU leaders looking to revamp rail routes and via the Danube to release grain and boost exports.

Turkey said ships could be guided around sea mines since the location of them is known by Ukraine and certain safe lines could be established at three Black Sea ports. However, these ports would then be vulnerable to Russian attack.

There are ideas to establish temporary grain storage for Ukraine grain in Poland and Romania to allow harvest to progress as they lack storage for at least 15m tonnes of grain and are looking to the EU to supply temporary storage solutions. The Ukrainian grain harvest is forecast to drop to 48.5m tonnes this year, down from 86m tonnes last year as the sown area will be down by 25%.

Global ending maize stocks for 2021-22 have been reduced by 500,000 tonnes to a total of 310.45m tonnes and world maize production has been estimated at 1.186bn tonnes which will be a drop of 30m tonnes on the year and this is due in part to dry weather conditions across the US mid-west increasing crop prospects. The latest US crop progress report said that maize good to excellent ratings were down slightly to 72% and soya conditions were put at 70% good to excellent.

Read more: Better weather drives optimism for UK wheat

UK April maize imports totalled 206,900 tonnes and this is higher than the three-year average of 183,400 tonnes and season-to-date maize imports total 1.777m tonnes. Full season imports are estimated at 2.184m tonnes and to reach this figure May and June imports would need to continue at an average monthly figure of 203,500 tonnes which is an achievable target.

On the continent, there are reports of the winter barley harvest starting in the south of France, but their spring barley ratings have fallen again down to 53% good to excellent. Drought conditions have eased with some rain earlier in the month, but Spain and Portugal have not had any rain and have imported some barley from the UK.

Sterling lost some value against the euro and closed last week at £1.00 equating to 1.16906 euros which makes UK exports cheaper to European importers.

UK barley exports for April totalled 70,700 tonnes and brings the season-to-date exports to 690,300 tonnes and to reach the full season forecast of 765,000 tonnes, May and June would need to export 37,300 tonnes each month.

UK oats have been competitively priced into the EU and 25,000 tonnes were exported in April to The Netherlands, Germany, Spain, Finland, Denmark, and Belgium. To date 79,400 tonnes have been exported from a full season forecast of 125,000 tonnes.

In 2018, before the ban of neonicotinoids came into force 528,000ha of oilseed rape was grown in the UK, last year this figure was down to308,000ha due to cabbage stem flea beetle and pigeon issues mainly in the south of the country. This year, as of May 24, 19% of the UK crop was rated 'excellent' and 51% as 'good'.

With recent high prices, this might tempt more growers to go back into oilseed rape as last week delivered rapeseed into Erith for harvest this year was quoted at £656.50 per tonne.

There could, however, be some downward pressure on prices. Australia is having near perfect conditions for growing its canola and the weather in Canada and Europe is suiting the crop nicely as well, so forecasters are looking at a 2022-23 global production surplus in oilseeds and vegetable oils – provided the weather holds for those countries until harvest.

World soyabean production is expected to increase by 35.5m tonnes nest season with consumption rising by 7.3m tonnes and ending stocks increasing by 12.6m tonnes by the end of next season.