Highlights in today’s morning note
The past two days remained fairly dry and warm across the South African maize-belt, which is not conducive for the new season crop. That said, conditions could soon change and weather forecasts for the next two weeks paints a positive picture with a possibility of good rainfall.
As we set out in our note on Monday, maize farmers have made notable progress regarding the planting process of the new season crop. In Mpumalanga and Kwa-Zulu Natal provinces, the process is almost complete and the optimal planting window for the eastern regions has passed. Meanwhile, the western regions still have sufficient time to plant as the optimal window only closes in December.
Although the focus is on the new production season, some farmers continue to deliver old season maize to commercial silos. The total maize deliveries were reported at 19 366 tonnes in the week ending 24 November 2017, which is 12% higher than the previous week’s deliveries. About 64% of this was white maize, with 36% being yellow maize.
Overall, South Africa’s 2017/18 marketing year’s total maize deliveries for “week 1 to 30” currently stand at 15.04 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.
The winter wheat harvest process is virtually over in the Western Cape and Limpopo provinces – thanks to cool and dry weather conditions. The other province should make good progress within the next few weeks.
About 119 978 tonnes of wheat were delivered to commercial silos in the week ending 24 November 2017. This is down by 29% from the previous week as the crop from most areas in the above-mentioned provinces has already been delivered. Overall, this placed the country’s producer deliveries for “week 1 to 8” of the 2017/18 marketing year at 635 612 tonnes.
The expected drier weather conditions within the next two weeks should allow the harvest process to continue uninterruptable, especially in the Southern Cape, where areas such as Mossel Bay have only harvested about a half of the crop.
With that said, expectations of persistent dryness mean the Western Cape province’ dam levels could remain critically low. The most recent update for the week ending 27 November 2017 shows that the province’s dams averaged 35%, which is 20% lower than the same period last year.
The domestic soybean market is still well supplied. Last month, the ending stocks were at 694 681 tonnes, which is double the volume seen in October 2016. This is a result of a record crop of 1.32 million tonnes in the 2016/17 production season.
Looking ahead, the 2017/18 soybean production season will most likely lead to a good harvest, albeit being slightly delayed due to a late start of the season on the back of drier conditions. The expected rainfall within the next two weeks bodes well for the new production season.
More importantly, the expected above-average rainfall between December 2017 and February 2018 means that the crop could receive sufficient moisture from sowing to pollination stage of development. So far, the planting process is at initial stages in most provinces but could make good progress in the coming weeks.
In global markets – The weather forecast for the next two weeks remains favourable in South America, with the expectation of widespread rainfall across Brazil and Argentina.
Brazil has made good progress regarding the 2017/18 soybean plantings. On the 27th of November 2017, the country had planted 98% of the intended area, which is 2% ahead of the corresponding period last year.
The South African potato market remained in positive territory in yesterday’s trade session with the price up by 0.49% from the previous day, closing at R47.54 per pocket (10kg). This was largely due to lower stocks of 634 786 pockets (10kg bag) at the beginning of the session.
During the session, the market saw a slight uptick in deliveries due to ongoing harvest activity. This subsequently led to a 6% increase in daily stocks to 674 637 pockets (10kg bag).
The fruit market saw widespread losses in yesterday’s trade session owing to increased commercial selling. The price of oranges declined by 12.4% from the previous day, closing at R6.46 per kilogram.
The price of apples and bananas were down by 0.4% and 7.9% from the previous day, closing at R7.89 per kilogram and R6.32 per kilogram, respectively.
Overall, this could be short-lived due to relatively lower stocks of 178 000 tonnes of apples, 232 000 tonnes of bananas and 35 000 tonnes of oranges.
Click below to read more recent reports by Wandile Sihlobo.