Highlights in today’s morning note
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 on the month end, 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 towards completion. About 26 633 tonnes of wheat were delivered in the week ending 05 January 2018, well below 408 893 tonnes delivered in the weeks of 09 to 29 December 2017. This placed South Africa’s wheat producer deliveries for “week 1 to 14” of the 2017/18 marketing year at 1.3 million tonnes.
After months of dryness which led to disappointing wheat yields, the Western Cape Province could receive light showers of between 16 and 20 millimetres in the week to 26 January 2018. It is an off-season period in wheat producing areas, therefore, this will not be of importance, but will benefit the households and other agricultural activities. The Western Cape province’s dam levels are currently at 28%, down by one percentage point from last week, and 16 percentage points lower than levels seen on 08 January 2017.
The recent light showers were mainly scattered in Mpumalanga province, leaving other provinces cool and dry. However, the forecasts for the next two weeks show a possibility of good rainfall 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 05 January 2018, which is well below 36 869 tonnes delivered in the weeks of 09 to 29 December 2017. Overall, South Africa’s 2017/18 maize marketing year deliveries for “week 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, Bethal, Bronkhorstspruit, Davel, Delmas, Ermelo, Graskop, Greyling Stad, Groblersdal, Hendrina, Irene, Kriel, Lydenburg, Middelburg, Ogies, Standerton and Witbank received rainfall varying between 12 and 42 millimetres. While this was light and scattered, it is a welcome relief after days of a heatwave.
Moreover, the next two weeks could bring additional rainfall across soybean growing areas of the country. This bodes well for crops which are still at early stages of development and needs moisture.
Unlike other crops such as maize and sunflower seed, the soybean farmers managed to plant on time a large share of the intended 720 000 hectares, 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 dryness.
After experiencing a good run in the past few days, the potatoes market pulled back in yesterday’s 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 (10kg bag) at the beginning of the trading session.
Moreover, 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 (10kg bag).
The fruit market was volatile throughout yesterday’s 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, closing at R7.70 per kilogram and R6.95 per kilogram, respectively. This followed a decline in daily stocks to 128 000 tonnes of apples and 29 000 tonnes of oranges.
Meanwhile, the price of bananas fell by 4% from the previous day, closing at R7.23 per kilogram. This was on the back of large stock of 217 000 tonnes, as well as commercial selling pressure.
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