Our May update expressed concern over crop establishment as the sowing of cereal crops in Scotland had only just got underway in the last two weeks of April. However, the conditions that we have seen since then couldn’t have been more supportive, with a mild and damp atmosphere keeping the soil in great condition to allow for vigorous growth. The result is that most crops have fared very well.
The immediate concern now shifts to the frequent thundery showers which have been bringing surface water to flatter and low-laying fields. It is known that spring barley doesn’t do well if it sits in wet conditions for any length of time. If these bouts of heavy rain don’t stop soon, there could be more issues on the horizon for beleaguered grain farmers.
Crop conditions
Wheat
Well-established wheat crops continue to look very promising and, with all fertiliser applications now done and most agronomy applications up to date, there can be a good degree of optimism that these crops should perform satisfactorily.
However, some fields that suffered from a difficult Autumn and Winter are struggling to develop, with stressed crops not tillering particularly well and many areas showing low plant counts. Some of the bare land in fields where water drowned the crop is still in this state as the ground hasn’t been dry enough to resow. Given the recent heavy showers, it is likely any seeds that were sown would suffer the same fate.
For farmers with poorer fields, it is now a case of damage limitation that will take the crops through to harvest with the hope that the yield will be enough to cover input costs.
Barley
Across the country, winter barley is now fully headed and, although it is still too early to judge just how well the grain sites will fill, the opinion amongst growers is that these barley crops should perform respectably.
After weeks of waiting and uncertainty, the emergence of Spring barley has raised hopes that there will be a better outcome with Spring cereals this season. Some fields that were sown earlier are not that much further on than later sown crops, and many later sown crops could probably perform better than those sown earlier. As spoken about earlier, it is the threat of extreme heavy showers which are creating surface water that is giving farmers a real challenge as they look to spray crops for weeds and disease. With the forecast looking more favourable for early June, so the hope is that the issue will subside soon.
Markets
Wheat
With a large proportion of domestic homes now filled for June, there is very little space for those who still have wheat to sell. Despite this, prices remain strong as the new crop futures have been firming steadily over the past couple of weeks.
This bullish trend is due to reports of late frost damaging vulnerable crops in Russia, which will lead to vast areas needing to be resown. The Russian grain authorities have indicated a drop of over 2Mt in expected harvest yield due to the frosts. This will have a significant impact on the planned export tonnage of wheat from Russia.
At this point, it appears that this issue has been factored into grain pricing, so futures may well settle at around the current values (November ’24 wheat futures are trading around £222. As an indication of how the market has turned recently, this was just under £180 in early March). If there are more reports of weather damage in Russia, or if further issues arise from the conflict in Ukraine, it is possible that the market could develop further.
On the flip side to this, without any new bullish news and kinder weather that will help wheat crops in North America and the southern hemisphere, it is also possible that we could see this level weaken again.
Old crop ex-farm prices for July are currently £207- £210 and new crop values in October are now £226-£229
Barley
A few late calls for feed barley have seen the ex-farm price rise quite sharply. There are also comments of trade reaching over £190 ex-farm in some areas. This is only for very small quantities since there is little residual barley around.
The new crop barley price has responded somewhat due to the higher new crop wheat price and feed barley for early post-harvest move is now trading at just over £190 ex-farm.
Despite wheat and feed barley rallying, malting values are still being held at £230, which reflects the recent optimism that crops may perform better than previously anticipated.