The winter wheat harvest process is in full swing in the Western Cape, with the progress made thus far reflected on the producer deliveries data which amounted to 250 376 tons in the week ending 02 November 2018. This equates to 28% of the Western Cape’s expected wheat harvest.
The weather conditions were favourable in most parts of the Western Cape last week (ending 9 November 2018), and that enabled farmers to increase the winter wheat harvest pace. The progress made will be reflected in the producer deliveries data for the week ending 09 November 2018 which are due for release tomorrow (14 November 2018).
While the crop in other provinces is still far from harvesting due to differences in planting period, there are expectations of higher yields due to favourable weather conditions. This is specifically the Northern Cape, Free State, Eastern Cape and Limpopo, amongst others.
While production could improve in the 2018/2019 season to 1,86 million tons on the back of the aforementioned favourable production conditions, South Africa will remain a net importer of wheat (1,4 million tons); therefore, developments in the global market could influence the local activities.
The United States Department of Agriculture (USDA) forecasts the 2018/2019 global wheat production at 734 million tons, which is 4% lower than the previous season’s harvest. The decline is mainly due to an expected lower harvest in Australia, Russia, Canada and the European Union (EU) region amongst others. Meanwhile, consumption is expected to remain fairly stable despite the uptick in prices. As a result, the global wheat ending stocks could fall by 7% from the 2017/2018 season to 260 million tons, which should support global wheat prices in the near-to-medium term. –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.