In about a month’s time, South African farmers will start land preparation for winter crop plantings in the Western Cape as the 2019/2020 production season approaches. Meanwhile, other winter crop areas such as the Northern Cape and the Free State will start planting around mid-year. This means the weather will again be a key driver of domestic wheat, barley and canola prices in the coming weeks, and will influence farmers’ planting decisions.

In terms of planting decisions, we are generally positive there will be good activity in all major winter crop areas, with weather conditions favourable during the past couple of weeks. Parts of the Western Cape received fairly good rainfall in recent weeks, which means the soil is not as moisture depleted as it was at the start of the 2018/2019 production season when the country was shaking off the 2017 drought.

There are indications that the coming months could bring rainfall to the Western Cape. On 14 March, the South African Weather Service indicated that the south-western parts of the country could receive above-normal rainfall conditions between May and July. This prediction bodes well for the 2019/2020 winter crop production season.

The Crop Estimates Committee will release the farmers’ intentions-to-plant data on 25 April which will give us a better idea of the potential harvest. At this point, our sense is that wheat plantings could be about 530 000ha which would be 5% higher than the 2018/2019 plantings. In the 2018/2019 production season, barley plantings of 119 000ha were the highest in 19 years. In the 2019/2020 production season, the area planted to barley is likely to remain fairly stable, or decline marginally if wheat plantings increase more than we currently anticipate.

Canola is another crop we believe could show about 4% year-on-year improvement in plantings, to roughly 80 000ha, if weather conditions remain as favourable as current forecasts suggest. Aside from the weather, prices will also be an important factor for farmers to consider as some crops tend to compete for land use. From a producer perspective wheat prices have been fairly favourable until now. The price of wheat has been supported mainly by the weaker domestic currency against the US dollar and by higher Chicago wheat prices, which are underpinned by tight global supplies. –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.

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