Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.
The winter wheat harvest is virtually over in South Africa, with the exception of the eastern parts of the Free State province which is in the final stages of the process. The yields were generally below average in the Western Cape and parts of the Free State province, whereas the Northern Cape received above-average yields.
South Africa’s winter wheat production is estimated at 1.48 million tonnes, down by 23% from the previous season owing to disappointing yields in the Western Cape and parts of the Free State provinces. An update of these figures will be released at the end of January but we don’t foresee major changes.
The wheat volumes recently delivered to commercial silos are well below the previous weeks. This shows that the harvest process is almost complete. About 26 633 tonnes of wheat were delivered in the week ending 5 January 2018, well below 408 893 tonnes delivered in the weeks from 9 to 29 December 2017. This placed South Africa’s wheat producer deliveries for weeks 1 to 14 of the 2017/2018 marketing year at 1.3 million tonnes.
After months of dry conditions which led to disappointing wheat yields, the Western Cape could receive light showers of between 16 and 20 millimetres in the week ending 26 January 2018. As it is an off-season period in wheat producing areas, this will not be of importance, but will benefit households and other agricultural activities. The Western Cape’s dam levels are currently at 28%, down by one percentage point from last week, and 16 percentage points lower than levels seen on 8 January 2017.
The recent light showers were mainly scattered in Mpumalanga province, leaving other provinces cool and dry. A possibility of good rainfall is forecast for the next two weeks, which will benefit the maize crop as it needs moisture at the current stage of development.
Unfortunately, it is too late for additional planting in areas that were unable to complete the intended area. If anything, the hectares will probably be utilised for production of sunflower seed in parts of the North West province, as its optimal planting window only closes on 20 January 2017.
While the focus is on the new production season, some farmers continue to deliver small volumes of old season maize to commercial silos. The total maize deliveries were reported at 6 295 tonnes in the week ending 5 January 2018, which is well below 36 869 tonnes delivered in the weeks 9 to 29 December 2017. Overall, South Africa’s 2017/2018 maize marketing year deliveries for weeks 1 to 36 currently stand at 15.17 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.
On Tuesday night (9 January 2018), Bethal, Bronkhorstspruit, Davel, Delmas, Ermelo, Graskop, Greylingstad, Groblersdal, Hendrina, Irene, Kriel, Lydenburg, Middelburg, Ogies, Standerton and Witbank received rainfall between 12 and 42 millimetres. While this was light and scattered, it is a welcome relief after the heatwave.
The next two weeks could bring additional rainfall across soya bean growing areas of the country. This bodes well for crops which are still at early stages of development and need moisture.
Unlike other crops such as maize and sunflower seed, soya bean farmers managed to plant a large share of the intended 720 000 hectares in time, and the crop is in a relatively good condition. This is with the exception of the areas that were affected by hail in the past few weeks, as well as parts of North West province which has experienced persistent dry conditions.
After experiencing a good run in the past few days, the potato market pulled back in yesterday’s (10 January 2018) trade session with the daily price down by 6%, closing at R41.04 per pocket (10kg). These losses were mainly on the back of relatively large stock of 718 365 pockets at the beginning of the trading session.
During the day, the market saw an increase in deliveries on the back of ongoing harvest activity. This subsequently led to an 11% uptick in daily stocks to 796 487 pockets.
The fruit market was volatile throughout yesterday’s (10 January 2018) trade session but ended the day on a mixed footing due to relatively lower stock levels and commercial buying. The prices of apples and oranges were each up by 5% from the previous day (9 January 2018), closing at R7.70 per kilogramme and R6.95 per kilogramme, respectively. This followed a decline in daily stocks to 128 000 tonnes of apples and 29 000 tonnes of oranges.
The price of bananas fell by 4% from the previous day (9 January 2018), closing at R7.23 per kilogramme. This was on the back of large stock of 217 000 tonnes, as well as commercial selling pressure.
Find the full report here.