Spotlight on SA wheat plantings

• Although canola and oats farmers have started planting in parts of the Western Cape province and wheat set to commence soon, the germination process could be slightly delayed. The near-term weather forecast point to a continuous dryness in the Western Cape province within the next two weeks.
• The weather forecast changed overnight. It currently shows clear skies across most parts of the province, therefore the view of possible light showers in the western parts of the province has changed. Moreover, this means the provincial dam levels could remain at fairly lower levels for some time. In the week of 23 April 2018, the dams averaged 16 percent, down by a percentage point from the previous week, and 6 percentage points from the corresponding period last year.
• Above all, the upcoming production season promises to be better than the last. While rainfall could be delayed, there is a bit of optimism following the local Weather Service view that parts of the south-western cape regions of the country could receive above-normal rainfall between the end of between this month and June 2018 .
• As set out yesterday, an important data point to keep an eye on today is the intentions-to-plant data which is due for release in the afternoon. Bloomberg analyst’s forecasts put South Africa’s 2018/19 winter wheat planting at 492 500 hectares, which is slightly above the previous season’s plantings of 492 500 hectares (see Chart below). Another key data is SAGIS monthly figures which will include wheat stock levels. Last month, South Africa’s wheat stocks were recorded at 1.5 million tonnes, which is 7 percent lower than the volumes recorded in February 2017.
• From a trade front, there were no imports last week, and the last imports were in the week of 16 March 2018, recorded at 25 135 tonnes. This placed 2017/18 marketing year’s wheat imports at 1.2 million tonnes, which equates to 63 percent of the seasonal import forecast of 1.9 million tonnes.

Chart: South Africa’s wheat area plantings

Source: SAGIS, CEC, Agbiz Research

*Bloomberg’s analyst estimate

Full report by Wandile Sihlobo in the attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 25 April 2018