Since our August report, the harvest has made very stilted progress due to the rather unhelpful weather conditions. Some areas in South East Scotland have seen more than 160mm of rainfall for August. This large amount of rain has made it quite a battle for the farmers to complete the harvest.
As in earlier reports, the hope for a quick completion of this season’s harvest was gradually being dashed due to the weather. As of early September, the local area in south Scotland and north Northumberland were still looking at around 40% spring barley and 30% wheat still to be cut with the wet conditions influencing the grain quality.
The last of the barley crops were tidied up between the showers in mid-August. Yields have been considerably variable and generally on the lower side of overall. Despite disappointing tonnages, the quality of the grain is good with healthy specific weights compensating somewhat for the lack of quantity.
Like the winter barley, yields in wheat crops have been extremely mixed. A pattern that seems to be emerging is that first wheat sown early has performed well, with reports of yields in excess of 11t/ha in some cases, whereas second wheat crops have turned out a very disappointing return with some yielding below 5t/ha. These differentials have been exacerbated by the type of ground they have been grown on. Both heavy and very light ground as well as free-draining soils have suffered more extremely. This is due to the very wet autumn hindering establishment on the heavier ground and the extreme droughty months of April and May spoiling the potential from the lighter soils.
Once again, like winter barley crops, the specific weights of the wheat are above average, but the wet conditions have affected wheat quality in other ways. Generally, hagbergs have dropped away to levels which will hinder crops from achieving milling standards for both bread and biscuit markets. This is particularly the case where delay due to the rain prevented harvesting the crop for more than a week after it was ready to cut.
In comparison to the winter cereals, spring barley has performed respectably well. This has come as a pleasant surprise to most growers, with yields often 0.5t/ha and more. This is higher than many expected to achieve, several reports of yields hitting over 9t/ha.
Across Scotland this hasn’t been all good news though. By the end of August, enough barley has been cut to establish how the weather has affected crops in different regions of the country. In the north east, many crops have suffered with skinned grain to quite high levels. In central regions, there have been high proportions of crops affected by pre-germ (grain germinating in the ear prior to cutting). Both these issues result in barley struggling to achieve their malting target thus falling into a feed market with consequences of extra drying costs as well as loss of premium. Fortunately, to date, most of the barley in south Scotland has escaped these issues and the majority has achieved malting standard. However, with the weather continuing to be awkward it is possible there will be trouble ahead on the barley still to see the combine.
To the end of August markets were continuing along a similar vein to the positions at the end of July. Feed barley is still trading just over £120 ex the farm although certain reports of higher prices do indicate a strengthening market. This is probably due to the large differential between barley and wheat which continues to hold steady in the mid-high £160’s on the November 2020 futures.
Since wheat yields in the Scottish harvest are reflecting much of what was reported in England at lower than anticipated levels, it gives added support to both the wheat and the barley prices. The sentiment in the market currently is slightly bullish and this is despite reports of good harvest outturn in Russia along with high expectations of maize in US.
At the time of writing, currency has affected the futures to quite a large degree with Nov 20 pushing upwards of £178 which will have a significant effect on the market values for the short to medium term
A lack of farmer selling is also supporting the prices since smaller yields are putting less pressure on storage.
Overall, a poorer than average harvest by quite a margin but a more bullish foundation to the markets which will compensate farmers who have a reasonable amount of grain on the market to a certain degree.