Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.
The most recent report from World Weather Inc. shows that soil moisture levels are still low in the western and central parts of the Free State and Eastern Cape provinces. Conditions are the same in the North West and Limpopo provinces. This partially explains the delays in maize planting in these provinces.
Mpumalanga, KwaZulu-Natal, eastern parts of the Free State, North West and Eastern Cape provinces have a fair amount of soil moisture which is conducive to the planting process. Fortunately, the weather forecast for the next two weeks promises good showers across the country, which should improve soil moisture and subsequently benefit the 2017/2018 production season.
While 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 10 781 tonnes in the week ending 8 December 2017, which is 27% lower than the previous week’s (ending 1 December 2017) deliveries. About 60% of this was white maize, with 40% being yellow maize. Overall, South Africa’s 2017/2018 marketing year’s total maize deliveries for week 1 to 32 currently stand at 15.12 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.
With the harvest process still underway in the Free State and Northern Cape provinces, the weather remains a key factor in the domestic wheat market. So far conditions in these particular provinces have been conducive and farmers are making good progress.
The areas that have harvested received above average yields in the Northern Cape, whilst in the Free State province, yields vary between average and below average. Overall, South Africa’s winter wheat harvest is estimated at 1.58 million tonnes, and these particular provinces constitute about a third of this estimate.
The volumes recently delivered to commercial silos recovered significantly from the previous week, which shows increased activity in the fields. About 139 359 tonnes of wheat were delivered in the week ending 8 December 2017, well above the previous week’s (ending 1 December 2017) volume of 49 318 tonnes. This placed South Africa’s wheat producer deliveries for week 1 to 10 of the 2017/2018 marketing year at 907 855 tonnes.
The leading wheat producing province, Western Cape, has completed the harvest process. However, the weather remains an important factor to monitor as dam levels are critically low. The update for the week ending 11 December 2017 shows that Western Cape dams averaged 33%, down by 1% from the previous week and 18% from the corresponding period last year.
Last season’s record soya bean harvest of 1.32 million tonnes did not completely substitute (soya bean) products imports. The International Grains Council forecasts South Africa’s 2017/2018 marketing year soya bean meal imports at 600 000 tonnes, which is 20% higher than the previous year. This is driven by increasing demand from the animal feed industry.
This shows that there is still room for growth in the South African soya bean industry if the product can be delivered at a competitive or profitable rate. In part, this explains the optimism regarding the 2017/2018 soya bean planting this season. Farmers intend to plant 720 000 hectares, the biggest soya bean area on record.
The planting process is currently underway across the country. The eastern areas have made good progress, whereas the central and western regions of the country experienced delays due to drier weather conditions. Fortunately, the weather forecasts for the next two weeks indicate that there could be higher rainfall, which should improve soil moisture.
The South African potato market took a breather in yesterday’s (13 December 2017) trade session, with the price down by 4% from the previous day (12 December 2017), closing at R45.32 per pocket (10kg). These losses were on the back of relatively large stocks of 820 395 pockets (10kg) at the beginning of the session.
During the session, the market saw an uptick in deliveries due to ongoing harvest activity. This led to a 12% increase in daily stocks to 918 475 pockets (10kg).
After receiving good gains in the past few days, the fruit market pulled back in yesterday’s (13 December 2017) trade session and closed in negative territory. The price of apples was down by 2% from the previous day (12 December 2017), closing at R8.83 per kilogramme.
The prices of bananas and oranges were down by 7% and 8% from the previous day, closing at R6.27 and R6.27 per kilogramme, respectively. However, these markets could soon gain ground due to relatively lower stocks. Yesterday, the apples, bananas and oranges stocks declined by 7%, 13%, and 36% from the previous day, closing at 159 000, 239 000 and 36 000 tonnes, respectively.