Highlights in today’s morning note
The maize crop conditions across South Africa paint a mixed picture. The eastern regions which predominately produce yellow maize, are in fairly good shape, although currently experiencing heat stress due to the heatwave. This area mainly covers Mpumalanga, Kwa-Zulu Natal, northern parts of the Eastern Cape, as well as the eastern Free State province. In Limpopo province, farmers managed to plant the intended area and the crop also appears to be in good condition.
Meanwhile, the western regions which largely produce white maize, are in bad shape. In fact, farmers have not managed to plant all intended hectares in the North West, as well as the western parts of the Free State province.
The most recent survey from Grain SA suggests that farmers in the North West province have only planted 70% of the intended area. The crop that has been planted also appears to be in poor condition due to persistent dryness and heatwave. In the central and north-western parts of the Free State province, the crop conditions are the same as the North West province, but the area planted is at 75% of the intentions.
As indicated in our note yesterday, the South African farmers planned to plant 2.47 million hectares of maize this season, which is 6% lower than the 2016/17 production season. About 56% of the area is set to be for white maize, with 44% for yellow maize. However, this might change due to the aforementioned delays in planting in the western regions of the country. An update will be released on 30 January 2018.
In the near term, the weather forecasts promise improvements, with chances of showers of between 16 and 60 millimetres across the South African maize belt within the next eight days. If this materialises, crop conditions could improve, but there is a limited chance for additional plantings as the ‘optimal window’ has already passed.
It is an off-season period in the South African wheat growing areas, therefore the current dry weather conditions are not much of an issue. However, they have already negatively affected the 2017 harvest, which is estimated at 1.48 million tonnes, down by 23% from the previous season. An update of this estimate will also be released on 30 January 2018.
While imports are set to increase significantly this season in order to fulfil domestic needs, the market is well supplied for now. South Africa’s wheat stocks were at 1.05 million tonnes in November 2017, double the previous month’s volume due to large deliveries on the back of the harvest activity. However, this is 30% lower than the corresponding period in 2016.
South Africa’s soybean crop looks promising in Mpumalanga and Kwa-Zulu Natal provinces. With that said, some areas experienced hail damage in the past few weeks, but the extent of it is still yet clear. There are rising concerns that the current heatwave could negatively affect the crop. Fortunately, the weather forecasts for the next two weeks shows a possibility of rainfall which should ease concerns and improves crop conditions.
As indicated in yesterday’s note, the South African farmers intended to plant an area of 720 000 hectares in the 2017/18 production season. Most provinces managed to achieve the targeted area with the exception of provinces such as North West – a relatively small soybean producer – which planted roughly 85% of the intended area thus far, and it is negatively affected by dryness.
The key sunflower seed growing areas of the country, particularly North West and north-western parts of the Free State province last received good rainfall in the second week of December 2017. As a result, the planting process has been delayed due to lower soil moisture.
A recent survey by Grain SA shows that farmers have planted roughly 40% of intended sunflower seed area in the North West province. In the north-western parts of the Free State province, the progress is much slower, with only 20% of the intended area planted thus far.
More concerning is that crops in areas that managed to plant have been negatively affected by the current heatwave. For areas that have not yet planted, the optimal planting window has narrowed. To be precise, the optimal planting window for sunflower seed closes next week in the north-western parts of the Free State and North West provinces.
Planting outside the ‘optimal planting window’ implies that crops could be negatively affected by frost later in the season, which will, in turn, lower the yields.
Overall, the weather forecasts currently paint a constructive picture of rainfall of between 16 and 60 millimetres across the sunflower seed growing areas within the next two weeks. While this will not be sufficient to replenish soil moisture, it is a welcome development following weeks of dryness.
As indicated in yesterday’s note, the South African farmers planned to plant 665 500 hectares of sunflower seed in the 2017/18 production season, up by 5% from the previous season. At the moment, there is still uncertainty as to whether this will be achieved or farmers will actually plant more. The weather developments this week will be a key deciding factor. In the end, the National Crop Estimate Committee will release the preliminary area planted estimates on 30 January 2018
The South African potatoes market started the week on a negative footing with the price down by 0.28% from the previous day, closing at R42.53 per pocket (10kg). These losses were on the back of large stocks of 824 387 pockets (10kg bag) at the beginning of the trading session.
However, during the day the market saw strong commercial buying interest, coupled with relatively lower deliveries on the back of slow harvest activity over the weekend. This subsequently led to a 30% decline in daily stocks to 577 342 pockets (10kg bag).
The market was again mixed in yesterday’s trade session. The prices of apples and bananas declined by 9% and 3% from the previous day, closing at R7.92 per kilogram and R7.42 per kilogram, respectively. This followed a 15% increase in apples daily stocks to 158 000 tonnes and a 3% uptick in bananas stocks to 208 000 tonnes.
Meanwhile, the daily price of oranges marginally increased by 1% to R4.98 per kilogram due to lower stocks of 24 000 tonnes (down by 4% from the previous day).
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