Spotlight on SA wheat market

SA agricultural employment down by 3% y/y in Q1, 2018
May 15, 2018
South African Agricultural Commodities Weekly Wrap
May 18, 2018

Spotlight on SA wheat market

  • The weather forecast has changed overnight to a slightly favourable outlook for winter crop growing areas of the Western Cape province. The next eight days could bring light showers of between 16 and 20 millimetres of rainfall over the province which bodes well for the new season.
  • Given that the province has not received meaningful rainfall in months, the forecast light showers will not make any notable improvement in soil moisture. The winter wheat growing areas of the Western Cape province need intense and persistent rainfall for soil moisture to improve. However, there are no signs of such rainfall in the near term. In fact, the forecasts for the last week of this month show clear skies over the Western Cape, which could somewhat redress the moisture that could be received within the next eight days.
  • Aside from the planting activity, the expected drier weather conditions also imply that the provincial dam levels could remain at fairly lower levels for some time. In the week of 14 May 2018, the dams averaged 17 percent, unchanged from the previous week, but down by 3 percentage points from the corresponding period last year.
  • Yesterday we discussed briefly the trade dynamics, particularly the wheat import tariff which is yet to be adjusted two times, but the timeframe for the process is unclear.  The uncertainty around this issue partly resulted in a decline in imports in the past couple of weeks.
  • However, the most recent data shows a bit of activity on the import front. South Africa imported 16 230 tonnes of wheat in the week of 11 May 2018. About 52 percent of this from Poland, with 48 percent from the US. This brought South Africa‚Äôs 2017/18 wheat imports to 1.2 million tonnes, which equates to 63 percent of the season import forecast of 1.9 million tonnes. 

 

Read the full report by Wandile Sihlobo below:

Agbiz Morning Market Viewpoint on Agri-Commodities 16 May 2018