#crop – Agri Limpopo

South Africa in for a good grain harvest, despite decline in area planted

Deidre Carter — Wed, 28 Feb 2018 08:18:14 +0000

South Africa’s grain and oilseed market could be well supplied in the 2018/19 marketing season owing to expectations of relatively large maize and soybean harvest. The National Crop Estimates Committee placed its first production estimates for maize at 12.2 million tonnes, which is well above our estimate of 11.2 million tonnes, albeit having declined by 27% from the 2016/17 production season – this is still above the annual consumption of 10.5 million tonnes. Soybean harvest is estimated at 1.4 million tonnes, a record harvest. Admittedly, weather conditions have improved over the summer crop regions but the maize production estimates came as a surprise considering the decline in area planted.

Although the estimate for total maize production is set to decline significantly from the 2016/17 production season, the expected 12.2 million tonnes means that South Africa is in for a good crop. If weather conditions remain favourable, as forecasters suggest, then the country will be well supplied in the 2018/19 marketing year which starts in May 2018 and ends in September 2019. In detail, white maize crop is estimated at 6.1 million tonnes, down by 38% y/y. Yellow maize crop is also estimated at 6.1 million tonnes, down by 11% y/y.

Moreover, the 2017/18 soybean production is estimated at 1.4 million tonnes, up by 5% from the previous season owing to an increase in area planted, as well as expectations of higher yields. This is somewhat unsurprising given that the eastern sections of South Africa received fairly good rainfall throughout the season.

With the exception of dry beans, all other crops registered a decline from levels seen in 2016/17 production season (Chart 1, other small grain not included in the chart). It is worth noting however that these are first production estimates, which means there could still be changes in the coming months, but will most likely be on the upside given the expectations of favourable weather conditions from this month until April 2018.

Click below to read the full report by Wandile Sihlobo

South Africa is in for a good grain harvest, despite the decline in area planted

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Soil moisture has improved significantly across the maize belt

Deidre Carter — Tue, 06 Mar 2018 07:16:57 +0000

Highlights in today’s morning note

South Africa’s sub-soil moisture – 02 March 2018

Source: World Weather Inc.

Maize:

Last week’s showers were mainly concentrated in areas around the eastern sections of Limpopo and Mpumalanga provinces, whereas other regions remained cool and dry. With that said, the most recent report from World Weather Inc. shows that soil moisture has improved significantly across the maize belt from dryness experienced at the beginning of the year, particularly the western sections.

As a result, the maize crop is generally in good condition in most sections of the maize belt. Moreover, The expected rainfall within the next two weeks should further improve soil moisture and crop conditions.

It is worth highlighting again that the South African Weather Service forecasts a weak La Niña phase through to early autumn. This means that the maize growing regions of the country could receive good rainfall within the next two month. Overall, this reinforces the National Crop Estimates Committee’s view of a fairly good crop of 12.2 million tonnes in the 2017/18 production season.

In the region, the most recent data from Botswana’s Ministry of Agriculture shows that 2017/18 grain area plantings were at 42 800 hectares by end of February 2018, well below the area 167 562 hectares planted at the corresponding period last year.

Wheat:

Yesterday there was no new news in the domestic wheat market. The main focus today will be SAGIS weekly trade data which should give an indication of the wheat import activity.

To reiterate a point made in yesterday’s note, the upward revision of domestic wheat production to 1.5 million tonnes led a 3% downward revision of 2017/18 wheat import estimate from last month to 1.85 million tonnes. This is however still the second largest import volume on record in a dataset starting from 1936.

On the global front – The International Grains Council forecasts 2017/18 global wheat imports at 180 million tonnes, up by 1% from the previous season. The key importing regions are North Africa and Southeast Asia, with imports estimated at 29 million and 27 million tonnes, respectively. In North Africa region, the key buyers are Egypt, Algeria, Morocco and Tunisia.

Sub-Saharan Africa is also amongst the key wheat importing regions with 2017/18 wheat imports estimated at 23 million tonnes, up by 7% from the previous season. The leading buyers within this region are Nigeria, Sudan, South Africa and Kenya.

Soybeans:

South Africa’s 2017/18 soybean production season started in a better position than other crops due to rainfall in the eastern sections of the country. The crop is currently in good conditions, despite the dry and cool conditions experienced in the past few days.

Looking ahead, the weather forecasts promise higher rainfall within the next two weeks, which should further improve soil moisture and benefit the crop. This actually reinforces the National Crop Estimates Committee’s view of a possible record harvest of 1.4 million tonnes in 2017/18 production, up by 5% y/y.

While this is a welcome development, hail is always a key concern for the eastern sections of South Africa, especially when there are expectations of heavy rainfall. In the past few weeks, hail affected some areas in KwaZulu Natal and Mpumalanga provinces, but the impact on crops was minimal.

From a global demand perspective, China recently bought 198 000 tonnes of soybeans from the US. In fact, the Chinese soybean demand will remain solid throughout the season. The USDA forecasts China’s 2017/18 soybean imports at 97 million tonnes, up by 4% from the previous season. Moreover, this constitutes 65% of 2017/18 global soybean imports.

From a supply point of view, Informa Economics revised its estimate for Brazil’s 2017/18 soybean production up by 2 million tonnes from the previous month to 114 million tonnes. This is almost in line with the previous season’s harvest. Meanwhile, Argentina’s 2017/18 soybean production estimate was revision down by 7 million tonnes from last month to 44 million tonnes, owing to persistent dryness. This is roughly 20% lower than the previous season.

RSA Potatoes:

After recording losses on Friday’s trade session, the South African potatoes market was fairly quiet in yesterday’s trade session despite the large stock of 1.1 million pockets (10kg bag) at the start of the session.

However, towards the end of the session the market experienced commercial buying interest, coupled with relatively lower deliveries on the back of slow harvest activity during the weekend. This subsequently led to a 38% decline in daily stocks to 666 195 pockets (10kg bag).

RSA Fruit:

The fruit market started the week on a negative footing owing to large stocks. The prices of apples and bananas were down by 2% and 8% from the previous day, closing at R7.23 and R6.47 per kilogram, respectively. This was on the back of large stock of 216 00 tonnes of apples and 346 000 tonnes of bananas.

Moreover, the price of oranges declined by 30% from the previous day, closing at R8.31 per kilogram due to commercial selling. Looking ahead, the oranges market should soon gain ground as stocks are at lower levels of 4 000 tonnes, compared to levels of over 50 000 tonnes in December 2017.

Full report available below.

Agbiz Morning Market Viewpoint on Agri-Commodities 06 March 2018

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South Africa’s summer crop production estimates lifted by 2% from last month

Deidre Carter — Thu, 29 Mar 2018 07:28:08 +0000

The National Crop Estimates Committee reaffirmed its view that South Africa is in for a good grain and oilseed harvest this season (albeit being less than the record achieved in 2016/17 season). The Committee revised its production estimates upwards by 2% from last month to 14.8 million tonnes . The notable uptick was on white maize, sunflower seed, sorghum and soybeans production. This was generally underpinned by favourable weather conditions across the summer crop growing areas, which subsequently lead to expectations of good yields. Encouragingly, there are forecasts of above-average rainfall over the summer crop growing areas within the next two months, which should sustain the crop in good condition throughout the production season.

In detail, total maize production estimate was improved by 2% from last month to 12.4 million tonnes. Of this, 6.3 million tonnes is white maize, with yellow maize at 6.1 million tonnes. This is well above South Africa’s annual maize consumption of roughly 10.5 million tonnes. Moreover, a crop of this magnitude, coupled with an expected large carryover stock of 4.2 million tonnes in the current marketing year imply that South Africa could remain a net exporter of maize in the 2018/19 marketing year which commences on 01 May 2018.

Soybeans production estimate was also revised slightly upwards from last month to a new record level of 1.4 million tonnes, underpinned by a large area planted, as well as expected higher yields on the back of favourable weather conditions. Another upswing was on sunflower seed production estimate which was lifted by 2% from February 2018 to 749 205 tonnes (although down by 14% from 2016/17 harvest). The late plantings in the western parts of the Free State and North West provinces were the key drivers of this monthly uptick..

Going forward, the weather will remain a key factor that could still influence the overall size of the summer crop harvest. As highlighted above, the favourable weather forecasts for the next two month should support the crop.

Full report available below:

SA’s Summer Crop Production Estimates

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Wheat import tariff triggered again to R293.74 per tonne

Deidre Carter — Fri, 06 Apr 2018 07:58:09 +0000

Trade aspects remain an important factor in the market as South Africa is a net importer of wheat. The wheat import tariff has triggered again on 20 March 2018 to R293.74 per tonne. The previous trigger was on 13 February 2018, which then, was calculated at R394.85 per tonne.

One of the key reasons behind this downward revision of wheat import tariffs is the increase in international wheat prices (US Hard Red Wheat No.2), which was supported by unfavourable weather conditions in the US wheat growing regions. To recap, the adjustments in the wheat import tariff are satisfied when the international wheat price deviates from the base price by more than US$10 per tonne for three consecutive weeks.

With that said, these rates are not yet applicable. The current import tariff is R716.33 per tonnes (see Chart below). The newly calculated rates will only be applicable after publication in a government gazette. The timeframe for this process is unclear. The import tariff will expectedly decline to R394.85 per tonne first, and then go down further to R293.74 per tonne.

Aside from wheat import tariff matters, the favourable weather conditions have brought a bit of optimism in summer and winter crop producing areas of South Africa.

Chart: South African wheat import tariff

Source: SAGIS, Agbiz Research

Full report by Wandile Sohlobo available in the attachment.

South African Agricultural Commodities Weekly Wrap 06 April 2018

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SA to remain a net importer of soybeans in 2018/19

Arithmus — Thu, 12 Apr 2018 13:27:33 +0000

Our recent interactions with farmers in some soybean growing areas support the National Crop Estimates Committee’s (CEC) view of a possible record crop of 1.39 million tonnes in the 2017/18 production season. The yields expectations vary across the country, mainly ranging from average and above average yields.
The CEC’s yield estimate is 1.77 tonnes per hectares, which is 23 percent lower than the previous season. With that said, this is slightly higher than the average yield of the past five production season (1.75 tonnes per hectare). Above all, the expected large harvest is boosted by both an increase in area planted, as well as expected higher yields (see Chart below).
Although this is a notable improvement, from levels of just a half a million tonnes in the 2009/10 production season, it will not satisfy South Africa’s consumption levels. The country will remain a net importer of soybeans, estimated at 20 000 tonnes. This, of course, is an improvement from higher levels of 27 508 tonnes in 2017/18 and 271 098 tonnes in 2016/17 marketing year.
All soybeans imported in the 2017/18 marketing year originated from the African countries, namely Zambia, Zimbabwe, Malawi, and Ethiopia. Underpinning this is a solid demand from the soybean crushing plants, which in turn is driven by growing demand from the animal feed industry.
Almost all the aforementioned countries had a bad start to the 2017/18 production season, characterized by warm and drier weather conditions, as well as fall armyworm infestations in the case of Zambia. Therefore, it is unclear if they will still dominate the South African soybean market this year. We could perhaps see a return of South American countries such as Paraguay or Brazil, which are currently expecting a fairly large harvest. More will unfold over the coming months.

Chart: South Africa’s soybean production

Source: SAGIS, Agbiz Research

Full report by Wandile Sihlobo available in the attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 12 April 2018

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Sub-Saharan Africa’s 2017/18 wheat imports up by 18% y/y

Arithmus — Mon, 16 Apr 2018 06:39:22 +0000

Drier and warm weather conditions have kept the US wheat on the back foot. On 08 April 2018, farmers had planted only 2 percent of the intended area for spring wheat, well below the area planted at the corresponding period last year, according to data from the USDA. These delays were mainly caused by persistent dryness in some States.
At the same time, the US winter wheat crop conditions were rated at 30 percent good/excellent, which is 23 percentage points lower than the same period last year. This too was largely due to persistent dryness in winter wheat growing areas. The USDA will release an update of US crop conditions later today. It is most likely that there is marginal progress from the aforementioned rates, as a large part of last week was mostly dry and cool in US wheat growing areas. The improvements could be seen if the expected rainfall this week materialises.
From a global perspective, the wheat market is well supplied. Last week, the USDA placed its 2017/18 global wheat production at 758 million tonnes, up by a percentage point from the previous season. At the same time, the ending stock was estimated at 271 million tonnes, up by 6 percent from the 2016/17 season.
This means that key wheat importing regions such as North Africa, Middle East and sub-Saharan Africa, amongst others, will be well supplied in the 2017/18 season, despite the decline in production in countries such as the US, Canada and Australia. The uptick in global supplies is boosted by a large harvest in Russia and India. The USDA forecasts sub-Saharan Africa’s 2017/18 wheat production at 26 million tonnes, up by 18 percent from the previous season. This equates to a 14 percent share of global wheat imports (see Chart below).

Chart: Global wheat imports

Source: USDA, Agbiz Research

Full article by Wandile Sihlobo in attatchment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 16 April 2018

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Key wheat importers in sub-Saharan African region

Arithmus — Tue, 17 Apr 2018 10:29:04 +0000

Yesterday we indicated that sub-Saharan Africa’s 2017/18 wheat imports could reach 26 million tonnes, up by 18 percent from the previous season. What we didn’t mention is that the leading wheat importers within the sub-Saharan African region are Nigeria, Sudan, South Africa, Kenya, Ethiopia and Côte d’Ivoire, with imports estimated at 5.1 million tonnes, 2.5 million tonnes, 1.9 million tonnes, 1.7 million tonnes, 1.3 million tonnes and 700 000 tonnes, respectively (see Chart below).
In the case of South Africa, the 2017/18 marketing year’s wheat imports currently stand at 1.2 million tonnes, which equates to 63 percent of the seasonal import forecast of 1.9 million tonnes. In the past few weeks, however, the imports were sluggish. The last consignment was received on the week ending 16 March 2018.
The slow import activity was either partially influenced by the delays in wheat tariff adjustments or mainly weak demand, or both. The wheat import tariff which triggered on 13 February 2018 to R394.85 per tonne, which is a 45 percent decline from the previous rate of R716.33 per tonne, but was only published on the Government Gazette to make it official on 06 April 2018.
The week ending 13 April 2018 was the first with the tariff at the new rate of R394.85 per tonne. SAGIS will release the weekly trade data for this particular week at midday, which should give us a sense of whether a relatively lower import tariff will stimulate imports or could remain sluggish for some time.

Chart: Key wheat importers in sub-Saharan African region

Source: USDA, IGC, Agbiz Research

Full report by Wandile Sihlobo attached below:

Agbiz Morning Market Viewpoint on Agri-Commodities 17 April 2018

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SA maize crop has generally matured

Arithmus — Tue, 24 Apr 2018 12:10:43 +0000

South Africa’s maize crop has generally matured, which means cool and dry conditions are an ideal weather for the crop at this stage of development. The past weekend presented the precise favourable environment, which is cool and drier conditions across the maize-belt.
The forecast for the next two weeks suggests that conditions could remain unchanged which bodes well for the maize crop, ahead of the harvest period. This is, however, with the expectation of the southern parts of the Free State and the Eastern Cape provinces which could receive light showers in the week of 09 May 2018. This could, nonetheless, have minimal impact on the crop as rainfall is expected to be light and scattered, varying between 13 and 25 millimetres.
This week is data-packed, but the most anticipated release is the National Crop Estimate Committee’s (CEC) third production estimate for 2017/18 summer crops. Bloomberg analyst’s forecasts put South Africa’s maize harvest at 12.49 million tonnes, which is slightly higher than last month’s estimate of 12.42 million tonnes. About 51% of this is white maize, with the remainder being yellow maize. The favourable weather condition across the country support the optimism.
We will get an indication tomorrow. Suffice to say, a harvest above 12 million tonnes will be well above South Africa’s annual maize consumption of roughly 10.50 million tonnes, which then means that the country would remain a net exporter of maize in the 2018/19 marketing year which starts on 01 May 2018. The supplies received a boost from a large carryover stock of 4.1 million tonnes in the current marketing year

Read the full report by Wandile Sihlobo in the attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 24 April 2018

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Spotlight on SA wheat plantings

Arithmus — Wed, 25 Apr 2018 06:34:11 +0000

Although canola and oats farmers have started planting in parts of the Western Cape province and wheat set to commence soon, the germination process could be slightly delayed. The near-term weather forecast point to a continuous dryness in the Western Cape province within the next two weeks.
The weather forecast changed overnight. It currently shows clear skies across most parts of the province, therefore the view of possible light showers in the western parts of the province has changed. Moreover, this means the provincial dam levels could remain at fairly lower levels for some time. In the week of 23 April 2018, the dams averaged 16 percent, down by a percentage point from the previous week, and 6 percentage points from the corresponding period last year.
Above all, the upcoming production season promises to be better than the last. While rainfall could be delayed, there is a bit of optimism following the local Weather Service view that parts of the south-western cape regions of the country could receive above-normal rainfall between the end of between this month and June 2018 .
As set out yesterday, an important data point to keep an eye on today is the intentions-to-plant data which is due for release in the afternoon. Bloomberg analyst’s forecasts put South Africa’s 2018/19 winter wheat planting at 492 500 hectares, which is slightly above the previous season’s plantings of 492 500 hectares (see Chart below). Another key data is SAGIS monthly figures which will include wheat stock levels. Last month, South Africa’s wheat stocks were recorded at 1.5 million tonnes, which is 7 percent lower than the volumes recorded in February 2017.
From a trade front, there were no imports last week, and the last imports were in the week of 16 March 2018, recorded at 25 135 tonnes. This placed 2017/18 marketing year’s wheat imports at 1.2 million tonnes, which equates to 63 percent of the seasonal import forecast of 1.9 million tonnes.

Chart: South Africa’s wheat area plantings

Source: SAGIS, CEC, Agbiz Research

*Bloomberg’s analyst estimate

Full report by Wandile Sihlobo in the attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 25 April 2018

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SA wheat planting could slow in the coming weeks

Arithmus — Mon, 07 May 2018 06:41:25 +0000

The winter wheat planting activity could slow in the coming weeks as the weather forecasts show a possibility of continued dryness in the Western Cape province within the next two weeks. Swartland is the only wheat-growing region that could receive light showers of between 16 and 25 millimetres this week. The prospects for the week ending 22 May 2018 presents similar dynamics, with light showers in areas around Overberg region.
On 23 March 2018, the South African Weather Service highlighted a possibility of above-normal rainfall in the south-western cape regions of the country between April and June 2018. This has not yet materialised and it is unclear whether the forecasts will change drastically in this month’s update or will possibly show a delay, but maintain the same theme of higher rainfall.
Aside from production dynamics, trade is also one of the topical issues in the domestic wheat market. There haven’t been any imports in the past six weeks. The last imports were in the week of 09 March 2018, amounting to 22 715 tonnes. This placed South Africa’s wheat imports at 1.2 million tonnes, which equates to 63 percent of 2017/18 wheat import forecast.
This slow import activity coincides with the delays in adjustments in wheat import tariff levels. The wheat import tariff triggered on 10 April 2018 to R437.24 per tonne. The previous trigger was on 20 March 2018, which then, was calculated at R293.74 per tonne, following an uptick in international wheat prices (No2 HRW) due to unfavourable weather conditions in the US.
However, these rates are not yet applicable. The current import tariff is R394.85 per tonnes. The newly calculated rates will be applicable after publication in a government gazette, of which the timeframe is unclear. The import tariff will expectedly decline to R293.74 per tonne first and then increase to R437.25 per tonne.

Read full report by Wandile Sihlobo in attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 07 May 2018

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