Highlights in today’s morning note
South Africa’s average dam Levels: week ended 13 November 2017 (last year’s figures in brackets – 13 November 2016)
Source: Department of Water and Sanitation and Agbiz Research
The optimal maize planting window has closed in the eastern parts of the country. Fortunately, key producing provinces such as Mpumalanga have already made notable progress with roughly 90%-95% of the intended area for this season already planted. In Kwa-Zulu Natal province, roughly 60%-70% of the intended area has been planted. The other areas in the eastern maize-belt can still plant, but yields might be slightly lower than the areas that planted during the optimal window.
There is still enough time for the western regions of the maize-belt as the optimal maize plating window only closes in December in this particular region. These are areas that predominantly produce white maize.
Overall, the weather forecast remains favourable with a possibility of good rainfall across the maize belt within the next two weeks. This could benefit the crop in the eastern parts of the country and replenish soil moisture in other areas ahead of the planting process.
The winter wheat harvest process is in full swing in the Western Cape province, with over 50% of the crop already harvested in Swartland and Overberg regions. The yields received so far are below average in many areas, which is unsurprising given that the weather conditions have been harsh for some time in the province.
While last week’s showers caused harvest delays in some areas of the province, the weather forecast for the next two weeks shows a possibility of drier conditions, which should accelerate the harvest process.
From a different perspective, this implies that there might be minimal improvements in dam levels, which are critically low. The update for the week ending 13 November 2017 shows that Western Cape dams averaged 35%, down by 1% from the previous week and 23% lower than the same period last year.
The Free State province, which produces roughly 19% of South Africa’s wheat crop experienced frost last week, but that had limited impact on the crop as it has already matured. (The National Crop Estimate Committee forecasts South Africa’s 2017 total wheat production at 1.66 million tonnes).
The soybean planting activity is still at initial stages across the country. The only province that has made notable progress is Kwa-Zulu Natal where almost half of the intended area has already been planted. Meanwhile, other provinces such as Mpumalanga have only planted 10%-15% of the intended area. In the eastern Free State, the planting process is still at initial stages, but that is not much of a concern as the optimal soybean planting window only closes in December.
The weather forecast for the next two weeks paints a positive picture of widespread rainfall across the soybean growing areas of the country. More encouragingly, the long-term weather forecasts suggest that the summer rainfall areas of the country could receive above normal rainfall between November 2017 and February 2018. This implies that the soybean crop might have sufficient moisture from sowing into pollination.
The South African potato market lost ground during Friday’s trade session with the price down by 2% from the previous day, closing at R34.42 per pocket (10kg). These losses were partially due to a large stock of 1.12 million pockets (10kg bag) at the beginning of the session.
However, during the session, the market saw strong commercial buying interest, coupled with a marginal decline in deliveries on the back of slow harvest activity. This subsequently led to a 6% decrease in daily stocks to 1.05 million pockets (10kg bag).
The fruit market ended the day mixed in Friday’s trade session. The price of apples was up by 13% from the previous day, closing at R8.78 per kilogram. This followed a 35% decline in daily stock to 140 000 tonnes.
Meanwhile, the prices of bananas and oranges declined by 10% and 16% from the previous day, closing at R6.13 and R5.83 per kilogram, respectively. These losses were partially on the back of relatively large stocks of 233 000 tonnes of apples. With regards to oranges – the strong commercial selling added bearish pressure to the market.
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