Locally, the winter barley harvest started around the 20th July and, with the weather being favourable, has progressed steadily ever since.
Initial reports indicated reasonable yields, with levels around 8+tonnes/ha in many crops. This has turned out to be better than most growers expected seeing as crops have had a tough season.
However, there is less positive news on the yield performance of the winter barleys as many of the samples are proving to be on the poorer side of average for grain fill and specific weight. This indicates that the crop potential could have been even greater if it had more supportive conditions during ripening to give a complete and healthy finish. Although most varieties that suit the pearling market are achieving the basic minimum specification, there is likely to be higher screening levels, leading to a lower outturn of finished product from these crops when compared with the previous season’s winter barleys.
Winter wheat crops are now beginning to senesce quickly and the first harvested crops could be as early as during the 2nd week of August. The reason some of the crops are maturing so quickly can be put down to late disease burning some of the leaves off quite prematurely. This could influence the grain quality and yield for these crops.
This season has been ideal conditions for the disease Septoria Tritici to have a greater impact than in the last several years with many even those varieties expected to be more resistant to the disease have been affected. It’s still too early to tell the full impact and since it struck quite late, it would be wrong to judge the consequences too strongly at this point.
Seeing as most crops seem to have coped with the difficult growing season well, there is a general mood of optimism. Despite the disease issues, expectations are still high for a good crop. With almost all the crops still standing, it will help the harvest progress much easier when it comes around.
Spring barley is also steadily moving toward harvest and the very earliest crops could be cut within the next fortnight, weather permitting.
As commented on in previous updates, the spring crops could be more mixed in performance. This will depend on sowing dates and conditions along with the levels of flooding and extreme dryness that they have had to endure.
Just like with wheat, it is too early to make an accurate assessment of any potential yield and grain quality. But, while some of the better crops will likely perform respectably, there is a degree of concern that the spring crop harvest will see the poorer end of the spectrum in terms of returns.
The last few months have seen several significant moves, both upwards and downwards, in the when futures markets. This season has been quite unusual as we are experiencing lower grain stocks across many parts of the global reserves. This has made the market much more nervous and responsive to reports where this harvests performance is likely to be anything less than average.
This has led to the volatility seen on the futures with highs of over £190/t and lows of below £170/t experienced recently. The main area of concern is in the north of the US and Canada where dry conditions have put many cereal crops under pressure. The US spring wheat crop is reported in some states to be the poorest seen for up to 30 years and, although this isn’t the most significant crop area-wise, it is bound to have a telling effect on this nervous market. There has also been news of Russia reducing its expectations for this harvest albeit by a relatively small percentage which will add to the bullish sentiment currently being shown in the market values. The Nov wheat futures are currently trading in the region of £185 which is just £6 off the top of the prices for that position this season and the consensus is that this is likely to be supported going forward unless something significant changes in the American weather situation.
Feeding barley prices have started trading just below £150 on an ex-farm basis in the local trading area. This price is likely to only stay at this level while there is an active selling market since there is less barley on the market this year and this level is too significant a difference to the level wheat is going to be trading at this harvest. The expectation is for the feed barley values to increase during later August and September toward £160 and possibly beyond.
Much will depend on the quality and yield of the spring crop when it gets going since there is an improving demand for malting barley again from distillers and brewers and if the quality is good there will be a much greater uptake of barley toward that market. The pressure that this will put on barley prices will be enhanced even more if the crop proves to disappoint on its yield.
In summary, all the indicators at this point lean toward a bullish trend in prices for both wheat and barley. The degree of bullishness will depend on how crops perform and what the harvest is affected like when the US and Canada get the combine harvesters rolling in the drought-affected areas. There is less likelihood of any diminishing of values than has been seen for a while but, as ever in these markets, who knows what the future holds!