We maintain that the winter wheat planting activity could slow down in the next couple of weeks as weather forecasts continue to paint a picture of drier conditions in the Western Cape. The weather charts show clear skies over the province during the next eight days.
The province will most likely receive light showers of between 10 and 20 millimetres in the week ending 25 May 2018. However, this is not sufficient to replenish soil moisture following months of persistent dry conditions. We place more emphasis on the Western Cape because of its share contribution on South Africa’s wheat production. The province accounts for 64% of South Africa’s intended 500 500 hectares for winter wheat in the 2018/2019 production season.
Apart from the planting activity, the expected drier weather conditions also imply that the provincial dam levels could remain at fairly lower levels for some time. In the week of 07 May 2018, the dams averaged 17%, unchanged from the previous week, but down by 3 percentage points from the corresponding period last year, 2017.
This is in contrast to the South African Weather Service’s expectations, highlighted in a report released on 23 March 2018. As set out in our note on Monday (7 May 2018), in March the local weather agency painted a possibility of above-normal rainfall in the south-western Cape regions of the country between April and June 2018. This has not yet materialised and it is unclear whether the forecasts will change drastically in this month’s update or will possibly show a delay but maintain the same theme of higher rainfall.
Apart from the domestic production dynamics, the focus on the global market will be on the United States Department of Agriculture’s World Agricultural Supply and Demand Estimate report, which will also present a view of the 2018/2019 production season. – Wandile Sihlobo, Agbiz
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.