In the July crop update, we polished our crystal ball and predicted that the winter barley harvest would get underway in South Scotland around the 10th July. With some warm, dry days at the start of July, the combines left the sheds and started work on the 8th July. This gave us the earliest start to a harvest we have experienced in Scotland by some distance, with wheat crops now starting to be harvested, which is unheard of in July.
This early harvest isn’t just a local phenomenon. Much of Western Europe is seeing similar, with the soft wheat harvest in France reported to be 86% completed by the 21st July. The average for this date for previous harvests is 59%.
The extreme dry spell we experienced in April and May forced crops to respond by growing rapidly through growth stages because of stress brought on by drought, resulting in this early harvest.
Crop conditions
Wheat
While initial reports from the few crops that have been harvested indicate a slightly lower yield than the previous two or three seasons, the grain quality is good. High protein contents, high Hagberg and very good specific weights are all being reported.
Early harvest crops tend to be off lighter soils, which will have been affected more during the dry spring conditions. A more in-depth assessment will be given once more of the crop has been cut.
Barley
With much of the winter barley crop now in the sheds, we are seeing a distinct variation in yields. The general opinion is that grain quality is better than average, but the tonnages are not where they have been in recent seasons.
Expectations were that winter barley crops had coped well with the dry conditions, but it does look likely that they have been affected and could be down as much as 5-10% on the 5-year average. The favourable July weather has meant barley has been harvested at low moisture levels, keeping drying costs to a minimum.
It is the spring barley crops that are giving farmers the greatest concern, with the effects of the dry conditions showing through. This is bound to affect both yield and quality. Plants are displaying shorter straw and have thrown up late tillers at different stages. Farmers will have to take this into consideration when making decisions on the timings of harvest and likely produce grain samples of mixed quality.
With the early crops in Scotland days away from being cut, both farmers and merchants are waiting on tenterhooks to see what samples look like.
Early cut crops in the south of England have shown high nitrogen levels across a high proportion of samples, excluding them from making the malting market. If this is repeated in Scotland, it will have a telling effect on market values for barley, which is further bad news for growers. Low yields, low prices and possibly extra drying due to immature grains are not a great combination.
Markets
Wheat
The bearish trend has continued in July, with a new contract low of £172.50 for Nov 2025 futures being seen in the middle of the month. That futures market has recovered slightly but is currently stuck at sub-£180 levels.
Weak global prices and low demand are still at the fore and being exacerbated by the early harvest, bringing large quantities of grain onto the European market earlier than normal. Reports of a possible record US maize harvest may limit any short-term recovery.
Reports are coming from Ukraine of a harvest being affected by both the ongoing effects of the conflict and adverse weather conditions, to the tune of being around 10% down from last year.
Locally, feed wheat values are trading ex-farm at £177 pre-Christmas, with harvest move values as low as £172 ex-farm. There does appear to be a premium being paid for soft wheat to distillers of around £5/t, which is probably a sign of how much hard milling varieties are being grown in Scotland now.
Barley
Feed crop needing immediate movement is now seeing a local price of £145 ex-farm. This is a level that is making most growers with suitable facilities put grain into storage with the hope that the market will improve.
A problem that may arise is that, if samples of this year's barley crop fall short of malting requirements, the amount of barley coming onto the market will be significantly higher than outlets can take. This would mean attempting to develop an export position. At present levels, that is unlikely to increase barley values over the next few months. The slight hope on the European market is that the reports coming from the Ukrainian barley harvest are correct, as that may hold values a bit firmer in the longer term this season.
In summary, the grain markets are at levels which will limit returns to the cereal growers this season. With the focus now on the northern hemisphere as it completes its harvest of barley and wheat, followed by the maize harvest, the next few weeks will be critical in determining the direction of the markets this season.