May saw a month of sunshine and record temperatures. In many ways, this has been welcome and enjoyable, but it has caused some degree of stress in crops, particularly those that had the potential to deliver heavy crops.
Elsewhere, the Ukraine conflict continues to grind on, while the world's media has its head turned to Iran, with its on/off ceasefire and lack of constructive peace talks, which continues to create uncertainty across many markets.
It is also worth taking into account the extreme drought conditions affecting the main US wheat-growing areas.
Crop conditions
Wheat
With a relatively dry May, the lack of any significant rainfall in May has started to take its toll on Winter wheat crops. The effect is varied across the UK, with the rating of crops as good to excellent across the country having fallen from 74% at the start of May to 64% now. In Scotland, the crop is rated at 97%, with areas of England varying from 45-85%.
Much of this is due to the fall of localised rain, which has helped to keep the wheat plants in good form. Most wheat crops are now heading, with some of the more advanced crops fully headed, which means they are reaching a critical stage for grain development, and rainfall soon would really improve the potential for crops to perform in terms of yield and quality.
With a reasonable amount of moisture, those crops rated below good to excellent could still respond and improve. The more stressed crops are showing some weakness to yellow rust and septoria attacks, so a robust fungicidal protection is needed to prevent these diseases from having too great an effect.
Barley
Winter barley crops have been headed since early May and are looking as if they have coped with the dry conditions better than wheat. Although the good to excellent ratings have slipped, the hope among growers is that their crops will now see themselves through to harvest, holding on to their full potential. The rhynchosporium outbreak we reported on last month doesn’t appear to have done any significant damage.
Spring barley establishment has been variable, with reports of strong crops developing across Scotland and some parts of England and Wales. There are areas of England, particularly in Yorkshire and Cumbria, where crops have struggled to get going.
Those crops with a healthy establishment are now showing full flag leaf, and some more advanced crops are starting to have awn emergence. Generally, disease pressure is low, but crops in more stressed areas could be susceptible to damage from the likes of rhynchosporium.
Markets
Wheat
With several cereal-growing regions of the planet experiencing drought conditions, global markets have been focusing on the effects of the weather, with conflicts in Iran and Ukraine being viewed as secondary.
The area causing the most concern is the main wheat-growing areas of the US. With these states giving less acreage to wheat, further damage caused by drought has led the USDA to announce the expectations for the lowest US crop of wheat for 53 years.
Recent ratings for good/excellent for these US crops have fallen to just 26%, down from 30% in May and 34% in April. It is expected that any rain forecast to fall on these crops will be too little, too late.
Beyond the US and UK, other areas affected by the dry conditions are Central and Eastern Europe. A recent bulletin reduced expected yields by up to 6%. Australia is another area affected, with the anticipated El Niño effect, along with the reduced use of fertiliser due to recent price increases, is expected to have significant reductions in wheat production.
This has led the IGC (International Grains Council) to project a global fall in grain stocks of 3%, which doesn't sound much but could be as much as 70mT across all grain commodities.
Old crop - Although domestic demand for old crop wheat is quiet, the ex-farm feed wheat value has responded to the market's concerns about the weather, and is now trading around £183 in Central Scotland - up from £178 at the start of May. Another indicator of how the markets are reacting is the increase in the milling wheat premium above feed wheat. At the start of May, the premium was £10/t and this has developed to £15/t and indicates concern over potentially poorer quality UK wheat and more expensive imported grain from the US.
New crop - Despite all the issues in wheat crops across the UK and beyond, the UK November wheat futures actually eased back from the level over £190 seen at the end of April and are now trading around £187. This may be because there are still reports of strong Western European and Black Sea wheat crops, along with strong carry-over stock levels in store.
However, ex-farm values are showing a stronger response to the weather concerns, and new crop wheat is now trading for Central Scotland around £185, up from £177 a month ago. One further indication of where markets could be heading through to 2027 is the Nov 27 UK wheat futures, which are currently sitting at £196 - £9 stronger than Nov 26.
Barley
Old crop - Feed barley values have continued to firm with an ex-farm level of £165 quite readily achievable. This will be due to very low residual stocks of old crop feed barley still lingering on farms in Scotland.
New crop - As commented in last month's report, there weren't many sellers rushing into the market at the prices being quoted at that stage (£150 for Oct/Nov), and this has meant the values have developed to £160 for Nov. At this point, there still doesn't appear to be a great deal of enthusiasm at that price. One thing farmers in Scotland, and other areas, will need to consider is the significantly larger amount of spring barley which will need to find a home other than malting. The brewing and distilling demand for malt continues to be weak, and this will be reflected in the much-reduced demand from malting barley merchants in harvest 2026. However, with an expected increase in export opportunities, this issue might not have as detrimental an effect as it might have done if harvests elsewhere on the planet were expected to yield better than the way they are looking at present.
Despite some crops in Western Europe looking strong and high stock carry-over, the determining factor will be how crops deal with the dry weather issues over the next month.