Weather

WINTER must be getting closer as yesterday was the first day that the Scottish Borders Council gritters were out spreading salt on the roads and, this morning, ground frost appeared for the first time. Time is marching on as the clocks will have changed when my next article is due. This past week has been mixed with some heavy rain at times as well as some cold sunny days, but the forecast is for temperatures to rise again this week.

Wheat planting issues

Wheat prices have risen over the past few weeks due to several factors, including adverse weather in major producing countries and strong global demand. The ongoing Ukraine conflict with Russia and the news that Iran had launched a ballistic missile attack on Israel saw futures prices rise once again.

Over the past two weeks, November 2024 Liffe feed wheat futures have risen by £6.20 up to £188.20/t and, for May 2025, up £6.35 to £202.50/t. Recently wheat prices have risen to levels not seen since last June due to the weather issues already mentioned which include Russia where dry weather is affecting planting of the 2024-25 crop and, at the same time, reducing the 2024 harvest yield yet again down to 83.0mt.

The planting progress is currently at the slowest drilling pace for over a decade and, in the Voronezh region, which is Russia’s fifth-biggest wheat-producing region, a state of emergency has been declared due to drought. To quote some figures, Russia’s winter planting has reached 13m acres so far against a total target area of 49.4m acres, so some way to go yet.

As Russia has had a strong export campaign so far this season and is now looking at a lower tonnage left to export than first thought, the country is looking at introducing a higher minimum export price. Dry weather is also causing planting delays in Ukraine and similar dry weather in the US is giving cause for concern where planting is under way. Argentina has reduced its forecast wheat yield due to drought and the lack of moisture, which is delaying maize and sunflower planting.

In parts of the UK where winter wheat is the primary arable crop, record rainfall has been recorded, leaving waterlogged fields and flooding which gives some concern for the potential production of the 2025 wheat crop. In parts of Europe, planting is also delayed by weather as well as the late harvesting of 2024 spring crops such as maize.

France has just harvested 6% of its late planted 2024 maize crop compared to 60% in a normal season and its winter barley is well behind schedule as well. In Australia, a dry start to spring and widespread frost damage in New South Wales is affecting crop potential and the wheat estimate has been reduced by nearly 2mt.

Weather is going to be the key issue in the coming weeks in all those affected countries where further adverse weather will support wheat prices, but improved conditions could put pressure on the wheat market once more.

Wheat sales and exports

The US has exported 11.2mt of wheat so far this season which is 22% up on last year and their exportable surplus is estimated at 22.45mt from a total wheat production estimated at 53.9mt. Mexico has been their top export destination so far this season. Russia has reduced its forecast for its 2024-25 wheat export total down to 47.6mt due to bad weather affecting production.

Egypt has agreed to purchase wheat totalling 3.12mt from November to April from the Black Sea region, which is one of the largest deals ever announced. Saudi Arabia purchased just over 300,000t and Algeria bought over 500,000t which has been sourced from Ukraine and Russia.

EU exports were 216,000t last week and a total of 6.354mt to date, compared to 8,902mt last year at this time, with the UK importing 23,000t last week.

Maize

Despite the trail of destruction left by the two recent hurricanes affecting the eastern US states, prospects for US maize and winter wheat look positive. Maize harvesting is 30% complete compared to the 27% average and the remaining crop is rated as 64% good to excellent which is 11 points ahead of last year.

Winter wheat planting reached 51% complete, 12 points up on the week. A major indicator in grain markets is the spread between wheat and maize prices and, as already been discussed, weather issues have been the reason for the increased wheat price.

The UK feed industry monitors movement between wheat and maize prices to optimise food rations. A higher price premium for wheat over maize could lead to increased demand for maize in animal feed. If the adverse weather continues, this could lead to further cuts in wheat production estimates which could widen the price gap even further and lead to a larger requirement for maize in feed rations.

Barley

Due to a large tonnage of malting barley quality being produced, more and more marginal quality tonnage is being sold as feed rather than risking rejection, and subsequent possible haulage charges as well.

Price discounts for feed wheat compared to feed barley vary between £25/t-£30/t depending on the available feed barley. Again, some areas have been affected by over 200% of average rainfall for September and will again, like last year, struggle to get their winter crop planted.

Another reason for potential malting barley being sold for feed is the slow demand from the drinks industry which results in the malting barley premium coming under considerable pressure and is likely to reduce the price premium, especially where feed prices are strong.

English crop production estimate for 2024

The Scottish Government is due to release its cereal and oilseed rape production this week, but Defra released the English figures last week.

In England, wheat production has been provisionally estimated at 10mt, 22% below last year and down 21% on the five-year average. The last notable wetter year was the 8.7mt harvested in 2020. Yield is provisionally estimated at 7t/ha below the five-year average of 8t/ha.

Overall total barley production is estimated at 4.9mt, which is above last year’s production but 7% below the five-year average.

Winter barley is estimated to fall by 26% on the year to 2mt and 18% below the five-year average of 2.5mt and yield estimated at 6.2t/ha, which is 0.8t/ha less than the five-year average.

Spring barley is estimated as the third largest crop since 2000 at 2.9mt, up 41% from last year. The yield is put at 5.6t/ha.

Oat production is estimated at 773,000 tonnes, up 20%, and if correct would rank as the fifth largest oat crop since 2000.

Oilseed rape is down considerably this year at 687,000t, 33% less than last year and down 38% on the five-year average – and would be the lowest production since at least 2000. Only the Eastern region reported a yield above 3.0t/ha at 3.1t/ha.

Pulses

This past week has seen an increase in demand for feed beans as their price has become more price competitive compared to other mid-range protein alternatives, due to increasing rapeseed meal prices.

Demand for UK spring human consumption beans remains strong due to the high levels of bruchid-damaged beans from the Baltic countries.

Green beans continue to trade at around £370/t ex-farm with plenty of tonnage available and with limited levels of bleaching.

Oilseed rape

Rapeseed prices are strong, driven by increased margins for crushers due to the strength in the vegetable oil markets. Due to further tensions in the Middle East which caused a spike in crude oil values, this allowed vegetable oils to also trade higher and allow crushers to pay higher values for oilseeds.

Soybean values are also increasing as dry conditions continue in Brazil during the key planting period.

Last week, ex-farm price levels reached £400/t which saw some farms selling, and rapeseed delivered into Erith in November was quoted at £405/t, up £10 on the week. EU rapeseed imports since July reached 1.19mt by September 29, 13% more than this time last year when 1.05mt had been imported.

The main rapeseed exporters to the EU were Ukraine with 744,000t and Australia with 352,000t. Current weather issues in both Canada and Ukraine could have short-term and longer-term impacts on rapeseed futures moving forward.