With the exception of small pockets still to be cut, the UK 2022 harvest is complete. Across the northern hemisphere, the harvest of wheat, barley and oats is also at an advanced stage, with attention starting to turn to the maize/corn crops.
This is all earlier than we might normally see and, in general, the conditions we have seen have been favourable in getting crops lifted easily and in good condition.
Markets are still unpredictable as they respond to the latest developments in Ukraine, which have delivered both bearish and bullish drivers over the past month.
Crop conditions
The dry conditions continued into early August, allowing farmers to continue harvesting very dry spring barley and winter wheat.
In mid-August, the weather turned a bit more broken, with frequent showers appearing. This meant that the grain being cut was slightly damper, but it was still much better than expected. The conditions have allowed the majority of the Scottish grain harvest to be completed before the end of August, which is one of the earliest dates in memory.
Any worries regarding the dry conditions affecting the quality of spring barley were banished very early on as the grain coming off the field was of good size, and weight and, for the malting market, no skinned grains and low nitrogen tests.
Most crops have reported better than average yields, with several farmers commenting on how much better crops have been than expected. In general, this harvest has proved to be one of the easiest, earliest and best quality in many years.
Markets
The sprint barley crops have presented the market with respectable yields of low nitrogen, good-sized, usable malting barley, without much in the way of skinning issues.
Despite a large proportion of the crop making the quality specifications, the demand has been maintained with malting barley prices holding steady at around £285 ex-farm. With feed barley holding a value between £240-£245 ex-farm, this represents a sound premium for the malting barley growers. This healthy malting demand will likely tighten up the availability of feed barley although the reported reduction in pigs and poultry demand could strike a balance holding the feed barley value back from being overly bullish.
Wheat futures over August did ease to below £260 but have since recovered to current levels at £270. Marginal strengthening of the wheat premiums to the end market has helped raise the ex-farm price to work about £270-£272 for September movement for feed/distilling outlets. The situation in Ukraine is still having a supportive effect on wheat and the concerns being expressed on the potentially poorer than usual maize crop is also providing a more bullish sentiment in the wheat market at present.
With 2023 in mind, recent rainfall across Scotland has led to much-improved sowing conditions. The hope among farmers is that the wet conditions don’t lead to fields getting too sodden to allow the sowing of winter cereals to progress effectively. November 2023 wheat futures are currently trading at £260 which means there is only £10 between current terms and movement in 12 months’ time. This could be a good value for growers to sell into!