SA wheat planting could slow in the coming weeks

• The winter wheat planting activity could slow in the coming weeks as the weather forecasts show a possibility of continued dryness in the Western Cape province within the next two weeks. Swartland is the only wheat-growing region that could receive light showers of between 16 and 25 millimetres this week. The prospects for the week ending 22 May 2018 presents similar dynamics, with light showers in areas around Overberg region.
• On 23 March 2018, the South African Weather Service highlighted a possibility of above-normal rainfall in the south-western cape regions of the country between April and June 2018.  This has not yet materialised and it is unclear whether the forecasts will change drastically in this month’s update or will possibly show a delay, but maintain the same theme of higher rainfall.
• Aside from production dynamics, trade is also one of the topical issues in the domestic wheat market. There haven’t been any imports in the past six weeks. The last imports were in the week of 09 March 2018, amounting to 22 715 tonnes. This placed South Africa’s wheat imports at 1.2 million tonnes, which equates to 63 percent of 2017/18 wheat import forecast.
• This slow import activity coincides with the delays in adjustments in wheat import tariff levels. The wheat import tariff triggered on 10 April 2018 to R437.24 per tonne. The previous trigger was on 20 March 2018, which then, was calculated at R293.74 per tonne, following an uptick in international wheat prices (No2 HRW) due to unfavourable weather conditions in the US.
• However, these rates are not yet applicable. The current import tariff is R394.85 per tonnes. The newly calculated rates will be applicable after publication in a government gazette, of which the timeframe is unclear. The import tariff will expectedly decline to R293.74 per tonne first and then increase to R437.25 per tonne.

Read full report by Wandile Sihlobo in attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 07 May 2018