Highlights in today’s morning note
The cool and dry weather conditions experienced over the weekend in the Western Cape province allowed for good progress in winter wheat harvest process. In Swartland and Southern Cape regions, the farmers have harvested roughly 80% of the crop. Meanwhile, Overberg has harvested just over 50% of its winter wheat crop. In these respective areas, the yields are reportedly below average.
In the irrigation areas of Limpopo province, the harvest process is virtually over with yields varying from average to below-average. In the Northern Cape, also irrigation area, the harvest process should start by mid-December. The crop is reportedly in good shape and there are expectations of good yields. Overall, the National Crop Estimate Committee forecasts South Africa’s 2017 total wheat production at 1.66 million tonnes.
Looking ahead, the expected warm weather conditions across many parts of the Western Cape province within the next two weeks should add momentum to the harvest process.
On the global front – The expected dryness across the US within the next eight days does not bode well with winter wheat crop which is still at early stages of development that requires moisture. At the beginning of this week, about 88% of the planted crop had already emerged. This is in line with the same period last year (19 November 2016).
The weather remains a primary focus in the domestic market as it influences planting activity. The delays in the eastern parts of the maize belt are mainly attributed to drier weather conditions. The optimal maize planting window for this particular region has already passed, and yields for the late planted crops could be negatively affected.
As indicated in yesterday’s note, the current warm conditions are not much of a concern for the western parts of the maize-belt as the optimal maize planting period only closes in December in this regions.
Overall, the expected rainfall within the next two weeks across the maize-belt is a welcome development, as it could replenish soil moisture and subsequently benefit the new season crop.
On the global front – At the beginning of this week, about 90% of the maize crop had already been harvested, which is 6% behind the same period last year (19 November 2016). The expected warm weather conditions in the Midwest within the next eight days should support the harvest process.
Elsewhere, the harvest process is in full swing in Ukraine. About 78% of the crop had already been harvested on 16 November 2017. The country’s 2017/18 maize crop is estimated at 25 million tonnes, down by 11% y/y.
The sunflower seed planting activity is still at initial stages due to dryness across the North West and the western parts of the Free State province. However, this is not much of a concern as the optimal sunflower seed planting window only closes in early January 2018.
Encouragingly, the weather forecast for the week ending 06 December 2017 shows a possibility of high rainfall across the sunflower seed growing areas of the country. This might improve soil moisture and benefit the crop.
While it is still early in the season, it is worth noting that some international observers such as SUNSEEDMAN are optimistic about the 2017/18 production season – estimating South Africa’s sunflower seed crop at 900 000 tonnes. This is 3% higher than the previous season due to expectations of an increase in area plantings and higher yields. More information will be available over the coming months.
The South African potato market saw extended losses in yesterday’s trade session with the price down by 2% from the previous day, closing at R33.83 per pocket (10kg). These losses were mainly on the back of large stocks of 1.05 million pockets (10kg bag) at the beginning of the 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 20% decline in daily stocks to 835 724 pockets (10kg bag).
The fruit market was once again mixed in yesterday’s trade session. The price of oranges was up by 26% from the previous day, closing at R7.34 per kilogram. This was partly due to a 3% decline in daily stock to 34 000 tonnes, as well as strong commercial buying interest.
Meanwhile, the prices of apples and bananas declined by 19% and 10% from the previous day, closing at R7.15 and R5.52 per kilogram, respectively. These losses followed notable increases in daily stocks to 213 000 tonnes of apples (up by 52% from the previous day) and 295 000 tonnes of bananas (up by 27% from the previous day).
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