Agbiz Morning Market Viewpoint on Agri-Commodities: 17 May 2017.

Agbiz Morning Market Viewpoint on Agri-Commodities: 16 May 2017.
May 16, 2017
Agbiz Morning Market Viewpoint on Agri-Commodities: 18 May 2017.
May 18, 2017

Agbiz Morning Market Viewpoint on Agri-Commodities: 17 May 2017.

Highlights in today’s morning note


According to Bloomberg, Kenya’s maize reserves are currently estimated at 4 500 tonnes, which is less than a day’s worth of consumption. This is a result of lower domestic production due to a dry spell in the country.

With that said, most Southern African countries are well supplied with maize and might be able to supply Kenya. Countries that most likely to participate in the Kenyan maize market are Zambia and Malawi (see Morning Viewpoint: 16 May 2017). South Africa will most likely have limited participation due to restrictions on imports genetically modified (GM) crop, as the country produces roughly 85% of GM maize.

South Africa’s maize exports are slowly gaining momentum. Exports reached 10 689 tonnes in the week ending 12 May 2017. About 78% of this was white maize and 22% was yellow maize. This season’s maize exports are estimated at 2.7 million tonnes. About 52% of this is set to be white maize and 48% to be yellow maize.


There are no signs of meaningful rainfall this month across the wheat growing areas of South Africa. The weather forecasts show clear skies throughout the country. This will possibly stall winter wheat planting activity around the Western Cape province. With that said, there is still time as the planting window is open until July 2017.

Moreover, drier weather conditions add risks in areas that have already planted. There are already reports that around Swartland, the crops that have emerged are dying off due to dryness. In other areas that have planted, there are risks that crops could fail to germinate.   

From a trade perspective, this was a quiet week, with no imports reported. The last imports were in the week ending 05 May 2017, coming in at 7 888 tonnes, all from Germany. This brought South Africa’s 2016/17 total wheat imports to 469 389 tonnes, which is 31% of the seasonal import forecast (1.5 million tonnes).

Although a net importer of wheat, South Africa continues to export wheat to regional markets. The total exports reached 6 364 tonnes in the week ending 12 May 2017, all went to regional markets. South Africa’s 2016/17 total wheat exports currently stand at 71 091 tonnes. About 30% of this went to Zimbabwe, 9% to Namibia, 14% to Botswana, 23% to Lesotho, 4% to Mozambique, 18% to Zambia and 2% to Swaziland.


The weather forecasts present a favourable drier outlook for this month which should accelerate harvest activity across the country. In areas that have harvested, yields are reportedly above the 1.6 tonnes per hectare average, which supports the National Crop Estimate Committee’s view of a record crop . 

In global markets – this morning Chicago soybean price was up 1.55% from the level seen at midday yesterday due to the recent sale of 132 000 tonnes of US soybeans for delivery to an unknown destination.

Although behind last year’s schedule, the US farmers have made notable progress with planting despite the erratic weather conditions. Early this week, they had planted 32% of the targeted acreage, which is 2% behind the same period last year. That said, the weather forecast for the Midwest currently shows a possibility of wet conditions within the next eight days, which could possibly stall the planting activity.

The USDA, together with a number of private observers, is optimistic about this season’s US soybean production. The highest area planting estimate is 36.3 million hectares, which is a 7% annual uptick. With regards to tonnage, the International Grains Council forecasts the 2017/18 US soybean production at 113 million tonnes, which is a 2% increase from the previous season. 

Soybean harvesting is towards completion in South America. Argentinian farmers had harvested 73% of the crop on the 16 May 2017, ahead of the corresponding period last year. The country’s 2016/17 soybean production is estimated at 57.5 million tonnes, which is slightly below the previous season’s crop of 58.8 million tonnes.

Sunflower seed:

The South African sunflower market painted a mixed picture during yesterday’s trade session with the spot price under pressure due to stronger domestic currency, as well as selling pressure. Meanwhile, the March 18 contract month price remained flat owing to lower traded volumes.

Besides the aforementioned, there was not much activity in the market as many role players are attending the NAMPO harvest festival this week. The weather forecast presents favourable drier conditions for harvesting this month. This should add momentum to the process and also benefit the areas that planted late, with the crop still drying up.

As indicated in our note yesterday, farmers in some areas are reporting lower yields than expected due to the sclerotinia disease. Moreover, frost remains a key risk on the horizon, but weather conditions have been favourable thus far.  If conditions remain favourable for the rest of this month, the crop could finish off well.

In global markets – yesterday the EU’s sunflower seed market gained ground with the price up 0.49% from the previous day, closing at US$407 per tonne. These gains were partly on the back of strong global demand for sunflower seed products (oil and meal).

The Black Sea sunflower oil market also saw marginal gains and eased at US$742 per tonne from US$741 per tonne the previous day. The increase in global demand, as well as the removal of restrictions by Turkey on Russia’s sunflower seed products,  were key factors underpinning the market. 


The South African potatoes market gained ground during yesterday’s trade session with a decline in stocks being the key driver of the market. At the start of the session, the stocks were at 1 019 337 bags (10 kg bags), down 18% from the previous day.

That said, during the session, the market saw a slight uptick in deliveries due to an increase in harvest activity as many people return from the weekend. Subsequently, the stocks increased by 0.3% from the previous day to 1 022 384 bags (10 kg bags).

SA fruit:

The Johannesburg Fresh Produce Market painted a mixed picture during yesterday’s trade session. The apples market gained 2% from the previous day, closing at R6.57 per kilogramme with support coming from strong buying interest.

Meanwhile, the bananas market was down 7% from the previous day, closing at R7.56 per kilogramme. These losses followed a 7% uptick in daily stocks to 149 346 tonnes. 

The oranges market lost 10% from the previous day, closing at R2.59 per kilogramme due to the relatively weaker buying interest, as well as relatively large stocks of 165 128 tonnes.

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