RSA fruit: Yesterday the fruit market managed to claw back some of its recent losses with support coming from strong buying interest. The price of apples was up by 9% from the previous day, closing at R6.91 per kilogramme. The bananas and oranges prices were, respectively, up by 0.14% and 11% from the previous day, closing at R7.01 per kilogramme and R3.09 per kilogramme. 

Maize: The National Crop Estimate Committee (CEC) revised its maize production estimates up by 2% from the previous month to 15.97 million tonnes. This is above the market expectations of 15.80 million tonnes and doubles the previous season’s production of 7.78 million tonnes.

Wheat: The CEC’s preliminary wheat planting data shows that farmers reduced the area planted in 2017 by 2% from the previous season to 498 850 hectares. This decline in the area was due to some farmers switching to barley and canola owing to profitability reasons.  

Click here to read the Morning Market Viewpoint on Agri-Commodities for today.

Soybeans: In its sixth production estimate, the CEC maintained its soybean production estimate unchanged from last month at 1.34 million tonnes. This is 81% higher than the previous season and the biggest crop on record. 

Sunflower seed: The CEC left its production estimate unchanged from the previous month at 821 970 tonnes. This is 9% higher than the previous season due to expected higher yields. The harvest process is virtually over with above average yields reported in many areas of the country. This supports the CEC’s view of a relatively large crop this season. 

RSA Potatoes: The South African potatoes market lost ground in yesterday’s trade session and closed in negative territory due to relatively large stocks of 846 765 bags (10kg bags). The price was down by 5% from the previous day, closing at R28.67 per kilogramme.

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The National Crop Estimate Committee revised its maize production estimates up by 2% from the previous month to 15.97 million tonnes. This means South Africa would, ideally, export roughly 4.0 million tonnes of total maize this year. However, weak global demand for white maize could lead to relatively lower exports of 2.2 million tonnes – leaving a large carry-over stock.

Figures released this afternoon by the National Crop Estimate Committee shows that 2017 total summer grains production could reach 18.44 million tonnes, which is a 96% annual increase. White and yellow maize production estimates were revised up, respectively, by 0.43% and 4.83% from the previous estimate to 9.51 million and 6.46 million tonnes. In total, reaching a record level of 15.97 million tonnes.

Apart from the dry beans production estimate which was revised up by 1.87% from last month, all other estimates were left unchanged. The harvest process is virtually over across the country and many areas reported exceptional yields, particularly on soybeans and maize, which support the CEC’s view of record crops.

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In terms of winter crops – the preliminary area estimate for wheat shows that farmers planted 498 850 hectares, which is 1.87% less than the previous season. Today’s data shows that South Africa will be well supplied this season and maize prices could remain at relatively lower levels for some time.  

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The most anticipated of all was the National Crop Estimate Committee’s sixth production estimate which showed a 2% m/m upward revision in maize production estimate to an all-time high of 15.97 million tonnes. Other commodities were left unchanged from the previous month.

In terms of market performance, all grain and oilseed commodities were under pressure with the exception of sunflower seed. For fruits and vegetables, the week has been fairly volatile, driven by changes in volumes traded.

Click here to read more.

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The annual food producer price inflation decelerated to 4.7% y/y in June 2017, from 5.7% y/y in May 2017. This shows the benefits of the higher agricultural output this year following good summer rainfall across the country. The deceleration was largely in grain, sugar, dairy, starches, and vegetable and fruit products. Meanwhile, meat and meat products accelerated due to on-going cattle herds restocking process resulting from the 2015-16 drought, as well as low base factors.

The general deceleration in food producer inflation is due to the recovery in agricultural production. The total production of summer grains and oilseeds is estimated at 18.44 million tonnes, which is a 96% annual increase. This has led to a widespread decline in agricultural commodity prices. White maize spot price currently trades at levels around R1 768 tonnes, which is 59% lower than the same period last year. Yellow maize spot price is trading at levels around R1 889 per tonne, which is 42% lower than the same period last year. Soybean spot price is at a level around R4 711 per tonne, which is a 31% annual decline. The decline in yellow maize and soybean prices will also benefit other sectors, such as the livestock and poultry.

While meat price inflation increased at the fastest pace of 17% y/y, there seems to be some level of improvement in slaughtering which could lift meat supply. The most recent data from the Red Meat Levy shows that farmers slaughtered 202 886 head of cattle in May 2017, up by 5% from the previous month.

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Looking ahead – the large agricultural output will keep agricultural commodity prices under pressure over the short-to-medium term. This essentially means that food inflation also could remain at relatively lower levels. With that said, the recent outbreak of avian influenza in the poultry sector remains a risk. The virus has been reported in isolated farms in Mpumalanga, Free State and Gauteng. We will closely monitor the developments within the poultry industry in order to ascertain the impact on food inflation in the coming months.

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Maize:

Interesting to note is that the International Grains Council (IGC) is even more optimistic on South Africa’s maize production, estimating the overall crop at 16.4 million tonnes, compared to 7.8 million tonnes in the previous season. The harvest process is in full swing with reports of exceptional yields across the country. The process could gain momentum within the next two weeks due to expected warm weather conditions in the maize belt.

Wheat:

The South African Weather Service noted that there is a possibility of wetter conditions in the south western parts of the country between August and October 2017. This will be a welcome relief after weeks of dryness in the Western Cape province during the first half of their traditional rainy season.

Soybeans:

As indicated in our note yesterday, South Africa’s soybean supplies for 2017/18 season could reach 1.41 million tonnes. This includes an opening stock of 84 792 tonnes, as well as commercial deliveries of 1.31 million tonnes and a small volume of imports. This is 30% higher than the previous season.

Click here to read more.

Sunflower seed:

Although South Africa generally expects a good sunflower seed harvest this season, the areas that planted late in a season received lower yields of between 0.6 and 0.7 tonnes per hectare. The country’s sunflower seed production estimate is 821 970 tonnes, up 9% from the previous season.

RSA Potatoes:

Yesterday the South African potatoes market managed to claw back some of its recent losses with support coming from lower stock levels. The price was up by 0.49% from the previous day, closing at R28.45 per 10kg bag.

RSA fruit:

The fruit market started the week on a mixed footing. The prices of apples and bananas were up by 9.37% and 0.15% from the previous day, closing at R7.59 per kilogramme and R6.86 per kilogramme, respectively. The apples stocks were down by 9% from the previous day easing at 215 990 tonnes. At the same time, the bananas daily stocks fell by 23% to 157 050 tonnes. Meanwhile, the price of oranges fell by 16% from the previous day, closing at R2.79 per kilogramme. 

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RSA Potatoes:

The South African potatoes market saw additional gains in yesterday’s trade session with the price up by 5% from the previous day, closing at R29.82 per 10kg bag. These gains were on the back of lower stocks of 826 523 bags (10kg bags) at the start of the session.

Maize:

South African maize exports fell by 43% in the week ending 28 July 2017 from the previous one and eased at 87 577 tonnes. This was mainly due to a decline in activity in the Kenyan market. About 60% of these exports were yellow maize, with 40% being white maize.

Wheat:

The southern parts of the Western Cape province could receive light showers this week, whereas other parts of the province could remain dry and cool. However, the week ending 17 August 2017 could bring rainfall of between 16 and 30 millimetres across the province which will possibly improve crop conditions and soil moisture.

Click here to read more.

Soybeans:

The harvest process is complete with exceptional yields which support the National Crop Estimate Committee’s view of a record crop of 1.34 million tonnes – an 81% annual increase.

RSA fruit:

The prices of apples and bananas retracted from the previous day’s highs due to large stocks, closing at R6.92 per kilogramme and R5.79 per kilogramme, respectively. The apples stocks were up by 27% from the previous day easing at 274 368 tonnes. At the same time, the bananas daily stocks increased by 79% to 280 678 tonnes.

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Food inflation decelerated to 6.8% y/y in July 2017, from 6.9% y/y in the previous month. This mirrors the benefits of the higher agricultural output following good summer rainfall across the country.

Although we expect further moderation in the next few months, the picture of the food basket is mixed. Most food products have decelerated, with the exception of meat which is proving stickier than expected, recording 14.4% y/y in July, which is the highest level since December 2011. This is on the back of an outbreak of avian influenza and cattle restocking process after the 2015-16 drought.

Click here to read full report.

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Africa remained South Africa’s largest market, accounting for 44% of agricultural exports – which is 9% below the 5-year average share. The EU accounted for 26% of South Africa’s agricultural exports in 2016, with Asia taking up 22%. Americas and the rest of the world (ROW) accounted for 5% and 3%, respectively.

Despite the worst drought in more than a decade, the South Africa’s agricultural sector recorded a positive trade balance of US$2.3 billion in 2016. This was boosted by growth in exports of edible fruits, beverages, spirits and vegetables, with the total agricultural export value amounting to US$8.6 billion, up 6% from 2015. These products are mainly grown in the Western Cape province, which was not as severely affected by the 2016 drought as the rest of the country. Meanwhile, imports also increased by 26% y/y reaching US$6.3 billion – driven by a notable uptick in grain imports on the back of the drought.

Looking ahead – Given the recovery in agricultural production, we expect the South African agricultural trade balance to remain positive in 2017. This will essentially support the country’s current account. 

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Wheat:

The weather remains a primary focus in the domestic wheat market. Unfortunately, there has not been any improvement over the past few days. The light showers that were received in some parts of the Western Cape were not sufficient to replenish soil moisture.

Maize:

This is a data-packed week, with the National Crop Estimates Committee’s final maize production estimates, SAGIS monthly and weekly data due for release. Any major changes in these particular data points could lead to notable movements in the maize markets.

Click here to read more.

Soybeans:

On 28 September 2017, the National Crop Estimates Committee will release its final soybean production estimates for 2017. The current estimate is 1.32 million tonnes, up 77% from the previous season’s production.

Sunflower seed:

This week the National Crop Estimates Committee will release its final sunflower seed production estimates for 2017. The current estimate is 870 095 tonnes, up by 15% from the previous season.

RSA Potatoes:

The South African potatoes market had a good run during Friday’s trade session with the price up by 1% from the previous day, closing at R34.96 per pocket (10kg). This was partly on the back of strong commercial buying interest.

RSA Fruit:

The fruit market ended the day mixed on Friday’s trade session. The prices of apples and oranges were up by 0.4% and 54.3% from the previous day, closing at R7.51 per kilogramme and R3.98 per kilogramme, respectively. Meanwhile, the price of bananas fell by 12.6% from the previous day, closing at R5.20 per kilogramme. 

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