In the past couple of weeks, our writing on the wheat market largely focussed on the Western Cape for two reasons. Firstly, the Western Cape is a leading producer of winter wheat in South Africa, accounting for 64% of the intended area of 500 500 hectares in the 2018/2019 production season. Secondly, the province experienced severe drought in the past few months, which partially explains the growing interest in the province’s weather developments, particularly at this period in the season where the crop is at its early growing stages and requires moisture.
At the beginning of the season, the rainfall was not evenly distributed in the Western Cape. The areas around Swartland and Overberg received more rainfall compared to the Southern Cape regions, which largely explains the differences in crop conditions.
Fortunately, the recent assessment shows improvement in all areas, although a large share of the crop in the Southern Cape still needs rainfall to recover. During the weekend (ending 1 July 2018), parts of the Western Cape received higher rainfall, which should not only benefit crops but also improve dam levels. The Western Cape provincial dam levels averaged 36% in the week of 25 June 2018, up by 2 percentage points from the previous week (ending 18 June 2018) and 13 percentage points from the corresponding period last year. Tomorrow (3 July 2018) we will receive an update for the week of 02 July 2018, which should show a notable improvement. Furthermore, the weather forecast for the week (ending 6 July 2018) shows a likelihood of widespread showers over the province, which could further improve soil moisture and subsequently benefit the winter wheat crop.
The second largest wheat producing province is the Free State, accounting for 19% of the aforementioned area of 500 500 hectares. The province’s crop is produced in both dryland and irrigation areas, which means improved soil moisture and dam levels following last summer’s good rainfall will benefit the crop. – 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.