Fair amount of rainfall in some sections of the maize belt over past two days

Highlights in today’s morning note

 

South Africa’s average dam levels: week ended 19 March 2018, with the same week last year in brackets

 

Source: Department of Water and Sanitation and Agbiz Research

 

Maize:

The past two days saw a fair amount of rainfall in some sections of the South African maize belt. This should help ease the heat stress concerns that were starting to emerge due to dryness in parts of the country’s maize crop growing areas, particularly in the western sections of the Free State and North West provinces .

From a trade perspective, South Africa exported 28 117 tonnes of maize in the week of 16 March 2018, well above the previous week’s volume of 14 010 tonnes. About 87 percent of these exports were white maize, with 13 percent being yellow maize.

The leading buyer was Venezuela with a share of 52 percent. Also worth noting is that this was the first consignment to this country since 2011. Trailing Venezuela was Namibia and Swaziland with shares of 11 percent and 8 percent, respectively. Overall, this placed South Africa’s 2017/18 maize marketing year exports at 2.0 million tonnes, which equates to 83 percent of the season’s export forecast of 2.4 million tonnes.

 

Wheat:

South Africa’s wheat market is currently off-season, but the recent weather developments in the major winter wheat production province, Western Cape, are worth mentioning. The weather charts for the next two weeks show a possibility of light showers of about 16 millimetres along coastal and western sections of the province.

While a welcome development, this will nonetheless not make a meaningful improvement on dam levels which are critically low, estimated at 19 percent in the week of 19 March 2018, down by a percentage point from the previous week and 8 percentage points from the corresponding period last year.

There have not been any new developments on the wheat import tariff since the calculations of the new rate on 13 February 2018. The newly calculated trigger rate is R394.84 per tonne, down by 45 percent from the current active level. This new rate will only be applicable after its publication in a government gazette. The timeframe for this process is unclear, but previous adjustments took more than three weeks.

The import activity has slowed. South Africa imported 30 635 tonnes of wheat in the week ending 16 March 2018, down by 45 percent from the previous week. All of this originated from Latvia. This placed 2017/18 marketing year’s wheat imports at 1.17 million tonnes, which equates to 63 percent of the seasonal import forecast of 1.85 million tonnes.

Although a net importer of wheat, South Africa continues to export wheat to regional markets. The 22nd batch of exports this season was recorded at 663 tonnes, well above the previous week’s exports of 67 tonnes. This was destined to Lesotho, Namibia and Swaziland. Overall, this placed South Africa’s 2017/18 wheat exports at 17 521 tonnes.

 

Soybeans:

Following light and scattered rainfall in parts of the eastern Free State and Mpumalanga province, last night and Tuesday evening, parts of these provinces received additional rainfall which bodes well for the crops. This seems to be the story of this period as the weather forecasts for the next two weeks shows a possibility of continuous rainfall.

While these are welcome developments, the week of 29 March 2018 promises rainfall of between 70 and 100 millimetres, which could cause crop damage if accompanied by hail and wind. The past few weeks brought a bit of hail in some regions of Mpumalanga and KwaZulu Natal province, but the crop damage was limited.

Apart from the potential heavy rain concerns, the soybean crop is in good condition across South Africa following the past few month’s rainfall. This supports the National Crop Estimates Committee’s view of a new record harvest of 1.4 million tonnes. The Committee will provide further crop assessment on 28 March 2018.

In global markets – There is optimism regarding Brazil’s 2017/18 soybean harvest. After a number of analysts and the USDA lifted their crop estimates, Soybean & Corn Advisor Inc. joined the pack by lifting its 2017/18 soybean production estimate up by one million tonnes from last month to 115 million tonnes due to higher yields in most areas. This is a percentage point higher than the previous season’s harvest.

 

RSA Potatoes:

On Tuesday the potatoes market managed to claw back some of its recent losses owing to lower stock levels of 808 418 pockets (10kg bag) at the start of the session. The price was up by 20 percent from the previous day, closing at R33.93 per pocket (10kg).

Towards the end of the session, the market experienced strong commercial buying interest, coupled with relatively lower deliveries on the back of slow harvest activity in some areas of the country. This subsequently led to a two percent decline in daily stocks to 789 935 pockets (10kg bag). This will potentially support the market today.

 

RSA Fruit:

The fruit market ended Tuesday’s trade session on a mixed footing. The prices of apples and oranges were down by 2 percent and a percentage point from the previous day, closing at R7.09 and R3.95 per kilogram, respectively. This was due to fairly large stocks of 250 000 tonnes of apples and 76 000 tonne of oranges, which was supported by increased producer deliveries.

Meanwhile, the price of bananas was up by 20 percent from the previous day, settled at R7.31 per kilogram due to commercial buying interest. These gains could, however, be short-lived because of a large stock of 349 000 tonnes, up by 7 percent from the previous day.

 

 

Find the full report in the link below.

 

Agbiz Morning Market Viewpoint on Agri-Commodities 22 March 2018