'Scotland produced a barley crop 7% above the five-year average last year compared to England which was 3% above their five-year average to produce in total 7.2m tonnes of which 4.8m tonnes was spring and 2.4m tonnes was winter barley and in total was 200,000 tonnes up on last year and quality was better as well'

Weather

Here in the Borders, we have seen very little rain since the end of October when the total for the month was 91.6mm or 3.60 inches to give a total for the year to date of 662mm or 26 inches which is a lot less than in many other parts of the country.

Temperatures have been above average as we have enjoyed a high-pressure weather spell over the country which has let fieldwork progress and get other outside jobs done as well. We have seen very little sun however as there has been a permanent cloud base cover for most of the month.

Winter sown crops are looking well which makes a change from some other parts of the UK where recent rain has delayed planting and may have to get some crops resown.

Wheat

Weather conditions in other parts of the world have not been as favourable such as in France where less than 30% of their winter wheat has been planted compared to the average around 60% at this time. At the end of October 80% of the US winter wheat had been planted which is behind last year and their five-year average.

Their wheat crop condition was reported as 38% good to excellent compared the average of 47%, which at this time is the second worse score since 1986. This result is due to lack of rainfall this year where 58% of the US wheat area is experiencing drought, including their top winter wheat producing state of Kansas which has 70% of its wheat area in drought and is being linked to a La Nina weather event once again.

However, their growing season is just beginning and there is ample time for conditions to change and rain is forecast in the next week or so. Argentina has made good progress with their wheat harvest and is looking to produce 19.5m tonnes following recent rain and they have raised their wheat export estimate to 13.3m tonnes and if achieved would be the second highest ever.

UK wheat update

Human and industrial wheat usage from July to September amounted to 1.1m tonnes of domestic wheat which was 17.5% down from the same period last year and used 395,500 tonnes of imported wheat which was up 45.1% from the same time as last year.

Despite starting the season with stocks of 3m tonnes of wheat, the drop in production this year is expected to outweigh the rise in carry-in stocks, strong imports and a reduction in consumption could see the tightest stocks since 2020-21. In 2024-25 the barley balance sheet is also expected to be tighter, driven by higher domestic consumption on the back of lower available tonne.

UK feed wheat price for November delivery was quoted at £187.50 per tonne and £200.00 for May delivery, which was down £1.50 per tonne from last week. Bread wheat delivered for November was quoted at £230.50, which was 50p up on last week. The UK is the fourth highest importer of wheat from the EU having imported 522,000 tonnes so far this season which is only 30,000 tonnes behind Morocco who is the third biggest EU customer. EU wheat exports up to 27th October total 7.261m tonnes which is well down on last year’s total at this point of 10.903m tonnes.

Russian weekly exports continue at around one million tonnes but have been hampered by having to stick to an agreed floor price higher than the current market price which is giving other countries a chance to win business and not having to compete with cheap Russian offers.

Maize

38,700 tonnes of maize was used last September in the UK for animal feed production which was 29.4% up on last year.

From July to September, maize usage in GB animal feed production was 102,100 tonnes which was up 25.7% from the same period last year. As of the 28th October, France had harvested 38% of their maize which was down from 89% a year ago and in the US 81% of their maize had been harvested compared to their average of 64%.

They are forecasting a crop above 386m tonnes which would be 40m tonnes better than in 2022-23 and last week their weekly maize sale reached 3.603m tonnes which was the fifth largest weekly sale over the past 20 years. Brazil exported 6.41m tonnes of maize in October which was down from their 8.45m tonnes shipped in October 2023.

US election

Last week Donald Trump was elected 47th president of the US and will be inaugurated on January 20, 2025.

As a result US markets have experienced days of volatility as soya oil futures rose to a four-month high on firm export demand and concerns that Trump could impose tariff on US imports of goods including imports of used cooking oil from China. This could cause problems for US soybean exports with shipments severely reduced during his previous term in office.

Trump mentioned he would raise tariffs on US imports of Chinese goods by at least 60% which could see a renewed trade war with China and could reduce the competitiveness of used cooking oil from China, which competes with soybean oil as a biofuel feedstock. As a result of the last US-China trade war, US soybeans became more competitive on global oilseed markets and following a deal with the US for China to buy more US products including agricultural goods, China’s purchasing of US soybeans offered significant support to the soybean market, which saw a rise in global oilseed prices.

UK Barley

Scotland produced a barley crop 7% above the five-year average last year compared to England which was 3% above their five-year average to produce in total 7.2m tonnes of which 4.8m tonnes was spring and 2.4m tonnes was winter barley and in total was 200,000 tonnes up on last year and quality was better as well.

Domestic demand from the brewing, malting, and distilling sector is expected to decline following reduced alcohol consumption and the latest UK human and industrial usage report shows that barley usage across the sector is 8% down on the year for July and August. The malting barley premium has continued to come under pressure, falling back from the highs seen last year.

A large tonnage from this year’s harvest and weaker demand has seen the premium down from last year. Ex-farm premium malting barley for spot delivery is quoted at £175.40 per tonne compared to feed barley at £153.10 which is a premium of £22.30 per tonne which is much lower than last year’s premium of £71.25 in October 2023. If the premium reduces even further, then malting barley could be used for animal feed reducing the risk of rejection and other related costs incurred such as haulage.

Looking forward to next year spring barley sown area will be down on this year by as much as 10-15% as more winter wheat will have been planted in recent weeks. Demand for animal feed barley is quiet now which has seen old crop barley at a £30.00 discount to wheat and new crop at a £20.00 discount.

Oilseed Rape

The European commission revised its 2024 rapeseed production forecast down to 17.1m tonnes which is 3% below the five-year average and from July 1 to October 25 EU exports of rapeseed are 26% less than last year at 200,000 tonnes, while imports are up 5% which is 1.8m tonnes.

In France, Germany and Poland, the top three rapeseed producers, sowing is complete, but establishment has been mixed due to unfavourable weather leading to concerns about the crop survival during winter. Delivered rapeseed into Erith for November is quoted at £439.50 per tonne, up £1.00 from last week and for May delivery, was quoted at £449.00, up 50p.

Australian and Canadian canola crops will start arriving into Europe in the new year which will supplement domestic rapeseed supplies for crushers. Australian rapeseed production for 2024-25 is now forecast down to 5.34m tonnes which is 10% less than last year due to poor growing conditions and EU production for 2025-26 is forecast at 18.62m tonnes which would be 9% up on the year.

Since July 1 to October 25, imposition of tariffs on Chinese goods exported into Canada and the US could dramatically affect domestic canola prices in 2025.

This is because China will likely retaliate and restrict canola imports, and we could see canola sales increase strongly into Europe.