Highlights in today’s morning note
Most parts of the South African maize belt received good rainfall in the past five days. A number of regions in the western parts of the country received rainfall varying between 20 and 110 millimetres. Meanwhile, some regions in the eastern parts of the country received rainfall of between 20 and 97 millimetres.
More encouraging is that the forecast for the next two weeks presents a possibility of continuous rainfall across the South African maize belt. This should improve soil moisture and subsequently benefit the crops in areas that managed to plant on time.
In the afternoon, the National Crop Estimates Committee will release its preliminary planting estimates data for South Africa’s 2017/18 maize crop. At the beginning of the season, South African farmers intended to plant 2.47 million hectares of maize, down by 6% from the 2016/17 production season. About 57% was set to be white maize, with 43% being yellow maize.
The most recent poll of analysts from Reuters suggested that South Africa’s 2017/18 maize hectares could decline by 18% from the previous season to 2.16 million hectares . Moreover, this is 13% lower than the farmers’ intentions that were released in October 2017. Meanwhile, Bloomberg’s analysts’ survey suggested that total maize plantings could be revised down to 2.15 million hectares.
These expectations are underpinned by persistent dryness and extreme heat experienced in the past few weeks in the western parts of South Africa. This somewhat prevented farmers from fully utilising their intended area
The main focus today is on the National Crop Estimate Committee which will release an update of South Africa’s 2017 winter wheat production estimate. Last month, the Committee placed its estimate at 1.48 million tonnes, which is 23% lower than the volume produced in the previous season.
The market consensus is that production could be revised down by 2% from the previous estimate to 1.45 million tonnes. This would be a 24% decline from the 2016 harvest.
With that said, other observers such as the International Grains Council are slightly more optimistic. The Council forecasts South Africa’s 2017 wheat production at 1.60 million tonnes, which is 8% higher than the current estimate of the National Crop Estimates Committee.
Bethlehem, Fouriesburg, Frankfort, Harrismith, Heilbron, Kroonstad, Reitz, Theunessen, Vrede, Warden, Amersfoort, Balfour, Graskop, Greyling Stad, Kriel, Lydenburg, Morgenzon, Standerton, Vereeniging and Wonderfontein regions of eastern Free State and Mpumalanga provinces received light showers of between 20 and 97 millimetres over the past five days.
Moreover, the soybean growing areas of South Africa could experience a boost in precipitation within the next two weeks which should improve soil and crop conditions. Recent assessments show that the soybean crop is generally in good conditions, despite the recent heat in the past few weeks.
The preliminary soybean plantings estimate data for 2017/18 production season is due for release in the afternoon. In October 2017, farmers planned to plant 720 000 hectares of soybeans.
The analysts’ surveys show that the eastern regions successfully planted the intended area, but experienced crop damage in some areas due to unfavourable weather conditions. Meanwhile, the North West province, a relatively small soybean producer, planted roughly 85% of the intended area due to drier weather conditions.
Allanridge, Bothaville, Bultfontein, Hoopstad, Losdoorns, Viljoenskroon, Wesselsbron, Bloemhof, Delareyville, Derby, Leeudoringstad, Lichtenburg, Potchefstroom, Schweizer-Reneke and Ventersdorp regions of western Free State and North West provinces received good rainfall over the past five days, varying between 20 and 110 millimetres.
Looking ahead, the weather forecasts indicate that there is an increased chance for additional rainfall of between 25 and 90 millimetres within the next eight days. This will improve soil moisture and subsequently benefit the sunflower seed crops in areas that have already planted.
With that said, it is a bit late for additional plantings. The sunflower seed optimal planting window closed on 20 January 2018. Planting outside the window implies that crops could be negatively affected by frost later in the season, which will, in turn, lower the yields.
On the data calendar, the National Crop Estimates Committee will release its preliminary planting estimates data in the afternoon. In October 2017, farmers intend to plant 65 500 hectares of sunflower seed in the 2017/18 production season, up by 5% from the previous season.
The South African potatoes market started the week on a negative footing owing to a large stock of 966 727 pockets (10kg bag) at the start of the trading session. The price was down by 2.47% from the previous day, closing at R36.77 per pocket (10kg).
However, during the day, the market experienced commercial buying interest, coupled with relatively lower deliveries on the back of slow harvest activity over the weekend. This subsequently led to a 32% decline in daily stocks to 657 179 pockets (10kg bag).
SAFEX lamb carcass:
Yesterday there was not much happening in the SAFEX lamb carcass market. The price remained flat at R77.00 per kilogram due to thinly traded volumes.
The South African farmers slaughtered 444 425 head of cattle in November 2017, up by 24% from the previous month, but down by 17% from the corresponding period the previous year. An update for December 2017 slaughtering activity will be released this week.
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