The last couple of weeks have seen the combine harvesters coming out of the sheds and busy in the fields, as almost all the winter barley, and much of the oilseed rape, crops are now harvested.
Although weather conditions have remained unsettled, most growers have taken the opportunity to cut barley crops during the dry spells, with moisture levels between 14-18%. Doing so has kept drying costs at a reasonable level.
Crop conditions
Wheat
Despite changeable weather through July, there is a lot of optimism on the potential of wheat crops. Crops that have struggled with poor autumn establishment, as well as those that suffered with Septoria, which has been particularly aggressive due to the wet conditions, are likely to return a disappointing yield. Locally, harvesting of early crops is expected within two weeks.
Barley
There are reports that the majority of the harvested winter barley crops are of sound yields and fair quality. However, there are comments on poorer-than-expected yields and grain fill which can be due to a lack of sunshine during senescence.
Spring barley crops are beginning to mature rapidly, with the earliest ready to harvest within two weeks. This season has not been kind to spring cereals. Late sowing, followed by cool, wet conditions throughout the growing season has led to farmers being pessimistic over their expected performance. Given the likely poor yields, achieving quality for the premium malting market will be important.
Markets
Wheat
With no fresh bullish drivers appearing in the wheat market, values have remained flat through July, with Nov 24 futures drifting between £190-£195, with current trade at £191.
As expected, crops in Western Europe are producing less tannage than in recent seasons, strong US crops and aggressive selling from Russia and other Black Sea marketeers have kept prices in check.
There are two areas which could turn this market around. The first is whether the Russians are being accurate with their crop reports which have recently increased their wheat crop performance while trade consultants anticipated the opposite. The second is the effect of very hot, dry weather on maize crops in Eastern Europe. The full effect of these conditions can only be speculated on at this stage. If both these factors come into play in a bullish fashion, the wheat market may well respond quite strongly. We should know more by September.
Barley
With winter barley performing as expected with reasonable yields, there has been a bearish feel to the barley trade over the last few weeks. This has pushed local ex-farm prices for feed barley down under £150, which is going to make returns from winter barley marginal at best.
All eyes are on spring barley and whether the anticipated poor yields are as bad as feared. If that is the case, then much depends on what ratio of crops achieve malting quality.
If crops perform poorly and the malting market absorbs a large proportion of the tonnage, then feed barley prices will respond. However, if there is poor quality barley that fails to meet malting specifications, this will keep feed prices depressed. The next few weeks will give a better picture of what to expect in the forthcoming season.