The good weather in early August allowed farmers to finish harvesting the winter barley and oilseed rape crops and progress into wheat and spring barley. However, the broken weather of the last couple of weeks has allowed only limited action with the combines.
As we came to the end of August, Scotland and north Northumberland had 50% of wheat crops and 75-80% of spring barley still waiting to be harvested.
Crop conditions
Wheat
Wheat sown early last autumn was expected to produce the best yield as they were well established before the weather deteriorated. This has proven to be the case, with the majority of crops cut in Scotland producing consistent tannages, with many over 10t/ha.
The average yield across the UK has been reported to be down around 7.5t/ha, and the crops still to be harvested north of the border will likely perform closer to this figure. Grain quality appears to be sound with good specific weights, although protein levels are low, which is causing issues in the milling markets.
Barley
As discussed in last month’s report, the winter barley crops have produced respectable yields and grain quality. With the windy, showery conditions across Scotland and Northern England, the spring barley harvest is now slowly getting underway.
The crops that have been cut are showing reasonable grain quality and noticeably low Nitrogen levels. Yields have been lower than average, with many reaching around 6t/ha.
Low nitrogen levels make practically all the spring cut barley cut so far acceptable for malting, and there appear to be few other issues, such as skinning, which would prevent crops from making the premium malting market.
Given the lower yields and good grain quality, this could limit the amount of spring barley looking for an alternative home in the feed or pearling markets.
Markets
Wheat
It may be expected that reports of low yields in wheat crops from the UK and much of western Europe would create a bullish sentiment in the market. However, at this stage, quite the opposite appears to be the case.
At the time of writing, the Nov 24 wheat futures are trading at £180, having just recovered from a low of £177 ex-farm, which was its lowest price since March.
Large carry-over of stocks from the 2023 harvest, currency factors as well as the expected large US maize crop are just three of the main drivers behind prices remaining low. There are also price pressures coming from the Black Sea (Russian and Ukrainian sales), but the long-term expectations are for these markets to come under pressure as the season progresses.
With the UK yield average at 7.5t/ha and record sown hectarage down to, this would develop a UK crop of between 11-11.5Mt, which is well down from the five-year average of 13.9mT. This would prompt some need to import wheat this season. With low proteins in European wheat crops, the gran being targeted for milling will dictate a fairly substantial premium this year.
Barley
Values for barley have been under pressure from the galling wheat market as well as the expectation of a large US maize crop, even though there are fears that the European maize crops may perform poorly.
Even though traders are expecting the market to settle around £150+ ex-farm with more barley being soaked up by malting buyers, lately, prices for feeding barley in Scotland have been quoted as low as £140 ex-farm recently.
Malting values have been easing recently with prices falling from around £220 about three weeks ago, to £195 ex-farm at the time of writing.
There is a feeling in the market that this might ease back even further unless the yields in the later crops fall away sharply or there are quality issues following the recent poor weather. Keep the fingers crossed for a more forgiving September to allow the remaining crops to be cut in good condition as well as setting up drier soils for sowing next season's crops.