Apart from one light covering of snow mid-month, followed by a week of hard weather January weather has been relatively kind and seasonally cold.

We are being led to believe that February is to be cold and often our worst winter weather comes after New Year so not the time to be thinking about land work yet.

On the markets, Liffee feed wheat futures reacted to upward movement in global markets over the past few weeks and physical prices rose as well, however prices fell back again as heavy snow and rain storms in the US brought in much needed moisture for the 2023 crop that was suffering badly from drought.

In the middle of January, 59% of the US winter wheat area was drought affected – well down from 63% at the beginning of the month. Since the storm, the drought area fell to 15% but Kansas – the U S’s top wheat producing state – is still 88% drought affected.

As a result of the welcome moisture for the crops, Chicago's wheat futures fell to a near 15-month low and UK wheat futures fell on the back of reduced crop concerns by more than £3 per tonne and May, 2023, futures currently stand at £232.50, compared to £297 last October. July new crop futures stand at £230.35 and again well down on the £291.50 in mid-October.

The US winter wheat area for 2023 is expected to be 11% up on 2022 which will be the highest for eight years, but the impact of the drought on the crop will not be known for some time.

With the UK having a substantial exportable surplus of grain this year, UK prices are following global markets closely. Therefore, any issues with US weather and crop conditions will affect UK price movements as well.

UK wheat production for 2022 is now estimated at 15.54m tonnes which is 11% up on the previous year due to an increased area and larger yields. Opening stocks remain unchanged from last November estimates, with most imports expected to be high protein wheat for milling and this brings the total wheat availability this season to 18.61m tonnes which is 7% up on the year.

Commercial end of season wheat stocks for 2022-23 are estimated at 2.59m tonnes, up 740,000 from last season. If this is correct, this will be similar to 2019-20 and as at the end of November, the surplus available for either export or free stock was forecast at 2.25m tonnes in 2022-23, over 2½ times 2021-22 levels and the largest surplus since 2015-16.

In November, the UK exported 112,900 tonnes of wheat, including durum – or 40,700 tonnes more than in October and the largest November volume since 2016-17. This takes UK wheat exports from July to November to 432,200 tonnes – the largest amount exported at this point in the season since 2019-20.

But, this export figure is relatively low given the exportable tonnage available. There are various factors for the low export tonnage this year given the available potential, one being the Ukraine invasion leading to price volatility and growers hanging on to stocks, and the total volume of wheat sold for spot and forward delivery from harvest until now is 4% lower than in the same period last season.

Another factor is UK lack of competitiveness on the global market, as cheap Black Sea tonnage has been undercutting our price and supplying export markets. In order for the UK to get rid of any surplus stock, exports will have to increase and this can only happen by being more price competitive.

Cheap wheat from Russia has been possible of a huge crop of 104m tonnes and its exports at 45.5m tonnes, compare to exports last year of 33m tonnes and saw Russia’s export pace rise to 1m tonnes per week in December. But the 104m tonne figure is being questioned by others who estimate Russia's crop nearer to 91m tonnes.

Cheap Black Sea exports may not be the case next year as its winter wheat area is believed to be 4% lower than last year, with only 17.7m ha sown, compared to 18.4m ha last season. Ukraine is expecting a reduced wheat ha as well at around 16m ha following a 2022 crop of 20m tonnes, which will reduce Black Sea competitiveness.

Around 11m tonnes remain of an EU estimated exportable surplus and demand remains high despite competition from the Black Sea and a strengthening euro, which reached a nine-month high last week. The US has also had strong wheat export sales in the last two weeks.

Human and industrial wheat use is expected to be up 4% on the year at 7.38m tonnes this season due partly to a rise in demand from the bioethanol and starch sector from last year. Wheat in animal feed has been revised down to 7.14m tonnes and barley in animal feed is also down by 4% from last year.

Maize use in feed is estimated up by 1.18m tonnes and oats, at 393,000 tonne,s is forecast to be down 17% compared with record levels last year. The final figure for UK oat production this year is 1m tonnes.

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Barley production has been revised up to 7.39m tonnes – 6% up on the year, despite a smaller harvested area in 2022. Given imports as per previous forecasts, this leaves total availability of barley this season at 8.42m tonnes, or 4% up.

While barley exports are forecast up on the year to an expected 239,000 tonnes more than last season, barley use in the human and industrial sector is also expected to be strong this season at 1097m tonnes due to increased demand from the brewing malting and distilling sector.

Old crop barley prices look as though they will come under pressure, though, as they are £20 above new crop values and with slow global economic activity, this has reduced demand for many commodities. New crop selling remains slow, with prices mostly below £200 per tonne and the price discount to wheat has been around £15-£17, recently.

Ukraine has forecast its 2023-24 grain and oilseeds crops to be around 50m tonnes, compared to 67m tonnes last year season and 106m tonnes in 2021-22. Again this could mean Black Sea competition in world markets lower.

Some 10% of Ukraine’s current maize crop remains in the field and total production is likely to be 25m tonnes less than the 41.9m tonnes it achieved in 2021-22. Analysts expect next year’s wheat crop to be 16m tonnes, compared to 20m tonnes and next year’s maize crop at 18m tonnes, but ongoing war could change all these figures.

Wheat prices could be supported by a reduction in maize production in Argentina, which is the world’s third largest maize exporter after Brazil and the US. Forecasters estimate its crop between 45-52m tonnes due to prolonged drought and heat.

Despite the rise in wheat and oilseed prices, there has been no corresponding prices in pulse markets as a result of oversupply of beans that remain on farm and few buyers. There is also little export interest.

The latest estimate for EU oilseed rape is put at 19.5m tonnes for harvest 2023, which would be similar to last year. Delivered into Erith for February is quoted at £473 per tonne, up £8.50 on the week.

Prices picked up after news of proposals in Germany to ban the crop-based element of biofuels to reduce greenhouse gases, which accounts for around 50% of European rapeseed demand but this proposal is now going to take full effect in 2030. Instead of rapeseed oil, increased amounts of used cooking oil and other waste products will constitute the non-mineral oil part of the biofuel blend.

The US is on a similar track, announcing a $118m fund to expand biofuel production in 17 projects designed to accelerate production of biofuels and cut greenhouse gas emissions, which suggests that demand for soya oil will remain strong.