Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.
The past two days remained fairly dry and warm across the South African maize belt, which is not conducive for the new season crop. However, conditions could soon change as weather forecasts for the next two weeks indicate a possibility of good rainfall.
As we set out in our note on Monday (27 November 2017), maize farmers have made notable progress regarding the planting process of the new season crop. In Mpumalanga and KwaZulu-Natal, the process is almost complete and the optimal planting window for the eastern regions has passed. 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 (ending 17 November 2017) deliveries. About 64% of this was white maize, with 36% being yellow maize.
South Africa’s 2017/2018 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 provinces should make good progress during 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 (ending 17 November 2017) as the crop from most areas in the abovementioned provinces has already been delivered. This placed the country’s producer deliveries for week 1 to 8 of the 2017/2018 marketing year at 635 612 tonnes.
The expected drier weather conditions during the next two weeks should allow the harvest process to continue uninterrupted, especially in the Southern Cape, where areas such as Mossel Bay have only harvested about half the crop.
Expectations of persistent dry conditions mean that Western Cape 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 soya bean 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 2016/2017 production season.
Looking ahead, the 2017/2018 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 during the next two weeks bodes well for the new production season.
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. 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 2017/2018 soya bean plantings. On 27 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 (29 November 2017) trade session with the price up by 0.49% from the previous day (28 November 2017), closing at R47.54 per pocket (10kg). This was largely due to lower stocks of 634 786 pockets (10kg) 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).
The fruit market saw widespread losses in yesterday’s (29 November 2017) trade session owing to increased commercial selling. The price of oranges declined by 12.4% from the previous day (28 November 2017), closing at R6.46 per kilogramme.
The price of apples and bananas was down by 0.4% and 7.9% from the previous day, closing at R7.89 per kilogramme and R6.32 per kilogramme, 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.