On Monday (8 October 2018), we painted a somewhat optimistic picture regarding the weather outlook this year, basing our opinion on the South African Weather Service’s report which indicated a possibility of above-normal rainfall over most parts of the summer crop growing areas between November 2018 and January 2019, with a chance of dry conditions later in the summer season due to an expected El Niño.
At the time, this view was in line with the Australian Bureau of Meteorology. However, yesterday (9 October 2018) the Australians placed the chances of an El Niño weather event developing this year at 70%, up from the previous estimate of 55%. This suggests that there is a higher chance that the 2018/2019 maize production season, which opened at the beginning of this month, could experience dry conditions.
It is still unclear whether South African farmers will reduce the intentions to plant because of this forecast. However, we will have a better indication when the Crop Estimates Committee releases the farmers’ intentions to plant data for the 2018/2019 production season on 25 October 2018. –Wandile Sihlobo
Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.