summer grain – Agri Limpopo

South African Agricultural Commodities Weekly Wrap

Arithmus — Fri, 12 Oct 2018 07:27:45 +0000

The weather was a key focus this week, not only because the 2018/19 summer grain planting window has recently opened in the eastern and central parts of South Africa, but also because of the mixed weather prospects for the season.
The local weather agency forecast a likelihood of above-normal rainfall between November 2018 and January 2019, with dryness later in summer. Meanwhile, the Australian Bureau of Meteorology placed the chances of an El Niño event developing this year at 70 percent, up from the previous estimate of 55 percent.
This means that even if the summer crops could have a good start of the season, the pollination stages could fall under the dry spell which might negatively affect the yields. At the moment, it is unclear how farmers will react to this. We will have a better view when the Crop Estimate Committee releases the plantings intentions data on 25 October.
Aside from the grain and oilseed market, the SAFEX beef carcass market experienced a quiet week with prices unchanged from levels seen last week. In terms of the supply, the South African farmers slaughtered 211 951 head of cattle in August 2018, down by 11 percent from August 2017 due to the herd rebuilding process after a reduction during the 2015-16 drought.

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Sourced: Agbiz, Agribusiness Research

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South African Agricultural Commodities Weekly Wrap

Arithmus — Fri, 26 Oct 2018 07:01:12 +0000

This week ended with some positive news in terms of production. South African farmers intend to increase the area planted to summer grain and oilseed by 5 percent from the 2017/18 production season to 4.03 million tonnes.
The planting activity has recently begun in the eastern and central regions of South Africa and likely to gain momentum following good rainfall in the past couple of days. Looking ahead, the weather, as a major determinant if the planned plantings materialises, will be a key focus in the market.
In terms of winter crops, wheat, barley and canola production estimates were lifted from the previous month due to expected higher yields. Nonetheless, these estimates, specifically wheat could be revised down marginally in the coming month owing to reports of recent crop damage in the Swartland area of the Western Cape following heavy winds and rainfall at the beginning of this week.
The SAFEX beef carcass market experienced a quiet week with prices unchanged from levels seen last week. In terms of the supply, the South African farmers slaughtered 211 951 head of cattle in August 2018, down by 11 percent from August 2017.

Click HERE for the full report.

Sourced: Agbiz, Agribusiness Research

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Factors currently underpinning SA grain and oilseed market

Arithmus — Thu, 15 Nov 2018 07:26:00 +0000

After experiencing a good run at the beginning of the week, yesterday almost all SAFEX grain and oilseed contract month prices pulled back and settled in negative territory. This was underpinned by a broad range of factors, but the most notable ones were the recovery in the domestic currency, as well as prospects of higher rainfall within the next two weeks. This morning the near term weather forecasts suggest that most parts of the country (with the exception of the Northern Cape and northern parts of Limpopo) could receive as much as 20 to 80 millimetres of rainfall. This is good for both areas that are yet to plant as it will improve soil moisture ahead of the process, and also bode well for recently planted areas as it will support the germination process of the crop.
The weather and ZAR/USD exchange are fundamental factors that will continue to underpin the domestic grain and oilseed market for months to come. In the case of the weather, however, the critical months are October to February, which is typically planting to pollination.
As set out in our previous notes, there is general optimism in the farming community regarding the 2018/19 summer grain and oilseed production. This is evident from the recent tractor sales data, and also farmers’ intentions to plant data. The data showed that summer grain and oilseed area plantings could increase by 5 percent year-on-year to 4.03 million tonnes in the 2018/19 production season. Most summer crops are expected to increase, with the exception of sunflower seed and groundnuts. While these farmer’s intentions are promising they are just that: farmers’ intentions. The actual summer crop planting estimates will be released on 29 January 2019.
The key risk on the path ahead, which we have emphasised in our previous notes, is the possibility of a weak El Niño. The South African Weather Service has indicated that this weather phenomenon could lead to drier weather condition in a period between the end of January and March 2019. This is a crucial period for most grain and oilseed because it coincides with pollination, which requires moisture. The global agricultural agencies such as the International Grains Council and the United States Department of Agriculture, amongst others, painted a somewhat positive picture of South Africa’s 2018/19 summer grain and oilseed production outlook, albeit the estimates lower than the previous production year. For example, maize production estimates currently range between 12.3 and 13.0 million tonnes, which is well above the long-term average of 12.0 million tonnes. Going forward, however, the weather will be a key determinant of whether any of the aforementioned data points materialise and this will be a central theme in the market for the next three months.

Winter Crops

Winter wheat harvest process is in full swing in the Western Cape. In the first six weeks of the 2018/19 marketing year, the producer deliveries amounted to 449 888 tonnes, which equates to 50 percent of the Western Cape’s expected harvest for the current season. While the upcoming deliveries figure for 16 November 2018 could show a further uptick form volumes delivered the previous weeks, the weeks of November 23 and 30 shows prospects of rainfall over the Western Cape, which could slow the process and might also negatively affect the quality of the crop in areas that have not yet harvested. Above all, South Africa’s wheat production is estimated at 1.86 million tonnes, up by 21 percent year-on-year. The improvement is on the back of higher yields and an expansion in overall area planted.
We are on the road again today, we will be back with the usual Agbiz Morning Market Viewpoint tomorrow, 16 November 2018.

Click HERE for the full report.

Sourced: Agbiz, Agribusiness Research

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SA tractor sales reach highest level since October 2014

Arithmus — Thu, 15 Nov 2018 14:15:38 +0000

October is traditionally a good month for South African tractor sales as summer grain and oilseed farmers are typically preparing for the planting process. This year did not disappoint, the sales reached 817 units, which is highest levels since October 2014. South Africa’s tractor sales for the first 10 months of this year amounted to 582 units, which is 10% higher than the corresponding period last year. The combine harvester sales also rebounded to 29 units in October 2018, which is double the previous month’s sales. This was mainly underpinned by the ongoing winter crop harvest process.

October 2018 tractor sales of 817 units (+16% y/y) far exceeded our expectations of 721 units, which would have been a 2% y/y increase (figure 1). Aside from the fact that October is at the start of the summer crop planting period with generally higher demand from farmers as they prepare for the new season, the fairly large machinery stock in the market might have also contributed to the increase in sales. Moreover, the tractor sales data support the recent farmer’s planting intentions’ figures, which showed that South African farmers intend to increase the area planting for summer grain and oilseed by 5% from 2017/18 season to 4.03 million hectares.
The combine harvester sales more than doubled the previous month’s volume and 45% higher than October 2017, with about 29 units sold. This was driven by the winter crop harvest process which is currently underway in barley, wheat and canola producing regions of the Western Cape. The combine harvester sales will most likely remain solid in the coming month as the winter crop harvest process is yet to start in other provinces.
Overall, we are generally optimistic about the South African agricultural machinery sales performance in the near-to-medium term. But tractor sales could slow in the coming months as a large share of the purchases have already been made and planting activity will be completed by end of the year in most regions.

Click HERE for the full report.

Sourced: Agbiz, Agribusiness Research

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South Africa’s agricultural exports grew by 7% y/y in 2018

Arithmus — Mon, 11 Feb 2019 06:33:23 +0000

In 2018, South Africa’s agricultural exports grew by 7% y/y to US$10.6 billion, a record level in a dataset starting from 2001.

From a destination point of view, the African continent and Europe continued to be the largest markets for South Africa’s agricultural exports, collectively absorbing 66% of total exports in 2018, measured in value terms.

From a national policy perspective, in his 2019 State of the Nation Address, President Ramaphosa signalled that potential expansion in agricultural production would mainly be on export-oriented products. There is already a clear pathway for this initiative as South Africa is currently well-positioned in terms of export markets, and there is clarity about products that show a growing demand in the world market.

Although South Africa has an import substitution objective through its Industrial Policy Action Plan, the substitution of some of the key imported agricultural products is unlikely in the foreseeable future as South Africa does not have favourable agroecological conditions, specifically for the production of palm oil and rice.

From a production perspective, at first, it was the International Grains Council which placed its estimate for South Africa’s 2018/19 maize production at 10.7 million tonnes, the United States Department of Agriculture (USDA) has also joined in with an 11.5 million tonnes estimate. Both these estimates are well below 2017/18 production of 13.5 million tonnes (commercial and non-commercial production).

Although most areas of the country received rainfall in the past couple of weeks, there has not been any material improvements in summer grains conditions, particularly in the western parts of South Africa (more precisely North West and Free State).

Click HERE for the full report.

Sourced: Agbiz, Agribusiness Research

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SA’s summer grains and oilseeds production estimates lifted marginally

Deidre Carter — Wed, 27 Mar 2019 05:54:16 +0000

South Africa’s Crop Estimates Committee (CEC) lifted its estimates for the country’s 2018/19 grains and oilseeds production by 0.4% from last month to 12.7 million tonnes. There were no adjustments in most commodities’ production estimates with the exception of sorghum which was lowered by 3% from last month, while the maize estimate was lifted marginally, and thus overshowed the decline in sorghum, resulting into an overall increase in the grains and oilseeds estimate (see Figure 1). With that said, the overall grains and oilseeds production estimate is still 16% lower than the 2017/18 harvest due to a reduction in area planted, and expectations of relatively lower yields in some areas.
To dive into more details of major crops, South Africa’s maize production was lifted, marginally, from last month to 10.6 million tonnes. This is slightly above Reuters analysts’ consensus forecast of 10.5 million tonnes, but well below last year’s harvest (Figure 1). White maize accounts for 49%, with yellow maize making up 51%. Weather conditions in the eastern side of South Africa, which predominantly produce yellow maize, have been favourable over the past few weeks, and that is reflected in the expected harvest. But we are concerned about white maize yield expectations owing to dryness experienced over the past couple of weeks in the western regions of the country — white maize areas. There is already evidence of deterioration in crop conditions in some regions, which leads us to believe that there could be a downward revision of the estimates in the coming months. Be that as it may, if South Africa harvests at least 10.0 million tonnes of maize this season, which will be added to an opening stock of 3.0 million tonnes when the 2019/20 marketing year starts on 01 May 2019, then there could be sufficient supplies in the market, and that will cover the country’s annual consumption of about 10.8 million tonnes.
Similar to white maize, sunflower seed, is predominantly produced in the western parts of South Africa, and has somewhat been negatively affected by drier weather conditions. This too raises concerns of a possible downward revision of the current production estimate of 563 590 tonnes, which is presently an unchanged figure from last month.
Above all, some crops in the western parts of South Africa were planted nearly a month later than the optimal period due to delayed rainfall, therefore, the one factor that most farmers fear is possible frost in the coming months as that could lead to poor yields. The CEC will release its third production update on 25 April, which will paint a clearer picture of the crop in the light of the aforementioned possible risks to the current estimates. This summer crop outlook remains a key factor for food price inflation over the coming quarters.

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