With this season reports all initially focusing on the weather and how changeable it has been, it is good to say that June has been much closer to the normal Scottish variations of coolness and warmth interspersed with the odd rain shower. These conditions have helped most cereal crops, but particularly winter wheat and barley, progress towards harvest in a positive way.
It’s great to report that winter cereals are looking more promising than at any point this season. Despite the slow development in the cold sprint temperatures, winter barley crops are now reaching milky ripe stages, which is an indicator that many crops are likely to be harvested in late July, weather permitting.
Now that the heads are fully forming and grain sites filling, the barley crops are generally being reported as having a good yield potential. So, if the sun can shine effectively in July to fill the grain properly, this could be a good year for barley growers.
Likewise for most winter wheat growers, who are reporting that their crops are showing good promise. Although virtually all the wheat crops have now fully headed, it is more difficult to assess their yield potential since the grain sites are not as visible. However, the plant head counts are mostly good and, if the weather plays nicely, yields should be on the right side of average.
Unlike the winter crops, the condition of spring barley is much more variable. Now that these crops are headed, their potential is easier to judge and although a good proportion of barley does have some promise, many crops have failed to tiller or lost tillers during the harsh conditions in April and May. This means that they are unlikely to perform to expectations.
Another factor that is still too early to determine, is the grain set. Initial appearances show relatively small heads and if the weather in July ends up restricting grain set, the poor number of plants along with low grain set figures could combine to make the spring barley crop struggle to achieve even an average crop.
The wheat futures had a significantly less volatile June compared with the previous few months. The general sentiment has been that the Northern Hemisphere wheat harvest will be reasonably sound and should at least maintain stock levels which have taken some of the bullish drivers away from the market.
The most recent trade on futures has seen Nov 21 wheat below £170, bottoming out around £168, although just in the past couple of days, due to very high temperatures in North West US and Canada and a slightly more bullish USDA report, there has been a small recovery to push these Nov futures back up to £173. The market is still very sensitive due to the previously reported low stocks of wheat and corn so any concerns on crop performance will take these bullish responses. Much depends now on the degree of time this hot weather hangs around and the potential damage it may cause. Spring wheat crops in particular in the US are being rated downward quite substantially.
Old crop wheat is still very tight and prices continue to reflect this with trade still well over £200 for July and early August movement. Old crop barley had reached levels around £200 briefly but has now drifted back to trade about £190 or just below. With new crop harvest on the horizon, this market has probably seen its peak and will drift quickly down soon to meet new crop price which is still trading in the £145-£150 region for late July/Aug. New crop wheat reflects the futures with the current local values hitting £172 for harvest movement.
With the aforementioned sensitivity playing a major factor on the markets, the international weather along with early harvest reports from across the US, Russia and Europe over the next few weeks will give the direction for the grain values to follow through till the main wheat harvest is coming in through August.