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Prospects for drier weather conditions to follow in the latter part of February and early March 2019.

According to Sanlam Agri heavy rainfall was sufficient in many areas but drought conditions still prevails in parts of the north-western, central to south-eastern Free State, the western parts of the North West and parts of the Northern Cape. If the central to north-west Free State and parts of the North West does not get more rainfall in the weeks to come, the region could face some drought related crop damages. According to weather forecasts, drier conditions are expected for the remaining February month and early March. The drier conditions may assist crop development with heat units, but drought will still be a huge risk.

Highlights

Maize

· The CEC in their finalization report of the 2018 maize crop, estimated the commercial SA maize crop at 12.51 million tons, down from the previous estimate of 12,931 million tons.

· Good rainfall received have cooled market fears over the upcoming crop, causing declines in the maize market and narrowing the spread between the yellow and white maize market. Follow-up rains remains critical for the central, north-western to south-eastern Free State, parts of the North West and KZN to ensure crop development and minimize drought damage. If drought conditions do materialize, crops may suffer which may support prices.

· The yellow and white maize prices did come under some pressure recently due to widespread showers that occurred in the first two weeks of February 2019.The spread between the two grades have also narrowed over the past two weeks.

Wheat

· SA wheat imports have been fairly slow. The market is still keeping an eye on the price movements during this tariff free-wheat import period.

· There’s still much uncertainty about the start of the winter rainfall expectations, however forecasters’ initial projections are for normal to later-than-normal rainfall.

Sunflower seed & Soybeans

· The CEC’s preliminary estimate for sunflower seed area is 44,000 hectares, which is 26.18% (157,500 hectares) lower than the previous season where 601,500 hectares was planted. This is the 3rd smallest area planted in the past 5 years. The CEC estimates 743,600 hectares planted under soybean, which is a 43,600 hectares decline (5.54%) compared to the previous season’s 787,200 hectares planted. Higher local crushing and processing, and higher local production of fats and oils curbed imports of oil meals. Exports of soya oil and soya meal from South Africa to other African countries in 2018 supported prices.

Wool

· Domestic wool market prices closed at R218.76 c/kg (clean) at the sale (1.67% higher than the previous week).

· China has suspended all greasy wool imports from South Africa due to the Foot and Mouth Disease outbreak detected earlier in the year. Therefore auction scheduled for the 20th February will be postponed. China is one of the world’s top buyers of wool. A restriction into the Chinese market, could have dire consequences for the local wool farmers.

Industry is confident that the issue is receiving urgent attention and a resolution will be made in the soonest time possible to minimize losses.


Agricultural Absa group


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