Wandile Sihlobo, Agbiz

The weather forecast has changed overnight and currently shows clear skies over the winter wheat growing areas for the next two weeks, which could strain crops, particularly in the Southern Cape regions. The previous week’s (ending 13 July 2018) rainfall in the Western Cape was not evenly distributed. The Swartland and Overberg regions received higher rainfall, but in the Southern Cape, it was fairly moderate. Hence, this region currently needs a follow-up rainfall in order to sustain the crop in good condition.

The forecast dry conditions also means that the dam levels could slightly decline, following notable improvements in the past few weeks. The most recent data from the Department of Water and Sanitation shows that the Western Cape provincial dam levels averaged 49% in the week of 16 July 2018, up by 2 percentage points from the previous week (ending 13 July 2018) and 25 percentage points from the same period last year (2017).

The expected cool and dry weather conditions in other provinces such as the Free State and Northern Cape could be helpful in supporting the planting activity. To reiterate a point made yesterday (17 July 2018), these are the biggest wheat growing provinces after the Western Cape, collectively accounting for nearly a third of the intended area of 500 500 hectares for this season. The planting window in these provinces typically runs between June and July of each year, while the Western Cape starts planting towards the end of April.

In terms of trade, last week (ending 13 July 2018) South Africa imported 29 781 tons of wheat, all from Russia. This is down by 47% from the volume imported in the week of 6 July 2018. This brought South Africa’s 2017/2018 wheat imports to 1,7 million tons, which equates to 89% of the season’s import forecast of 1,9 million tons.

On the global front, the weather remains a key focus as the spring wheat crop is at stages of development that requires moisture. Parts of Europe and the Black Sea regions experienced drier weather conditions in the past couple of weeks, which have negatively affected the crop. In the United States wheat benefited from recent rainfall in the Plains. On 15 July 2018, about 80% of spring wheat was rated good/excellent, unchanged from last week.-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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