Agbiz Morning Market Viewpoint on Agri-Commodities: 19 July 2017.

Agbiz Morning Market Viewpoint on Agri-Commodities: 18 July 2017.
July 18, 2017
Agbiz Morning Market Viewpoint on Agri-Commodities: 20 July 2017.
July 20, 2017

Agbiz Morning Market Viewpoint on Agri-Commodities: 19 July 2017.

Highlights in today’s morning note

Maize:

With this month’s production estimate update due for release next week, 26 July 2017, the consensus prediction amongst analysts polled by Bloomberg is 15.80 million tonnes, which is 1% higher than the previous month’s estimate of 15.63 million tonnes.  Moreover, this doubles the last season’s crop.

In terms of trade, South African maize exports recovered a bit from the disappointing levels seen in the week ending 07 July 2017. The country exported 82 859 tonnes of maize in the week ending 14 July 2017, compared to 32 699 tonnes the previous week.

About 87% of this was yellow maize and 13% was white maize. In addition, 64% of total maize exports went to Taiwan. South Korea and Lesotho accounted for a 16% and 6% share of weekly exports, respectively. Overall, South Africa’s 2017/18 total maize exports currently stand at 544 874 tonnes, which equals to 24% of the season export forecast (2.2 million tonnes).

Wheat:

The recent weather forecasts still paint a picture of possible drier conditions within the next two weeks across many parts of the country. This is with the exception of the western areas of the Western Cape province which could receive light scattered showers.  This essentially means the domestic wheat crop could be strained within the next two weeks as it urgently needs rainfall.

The most recent data from the Department of Water and Sanitation shows that the Western Cape dam levels were estimated at 25% full at the beginning of this week (17 July 2017). This is 26% lower than the same period last year .

In terms of trade, South Africa imported 30 722 tonnes of wheat in the week ending 14 July 2017, all from Russia. This brought South Africa’s 2016/17 total wheat imports to 639 756 tonnes, which equals to 42% of the seasonal import forecast (1.5 million tonnes).

Although a net importer of wheat, South Africa continues to export wheat to regional markets. Exports were recorded at 594 tonnes in the week ending 14 July 2017, all went to Botswana and Namibia. Overall, South Africa’s 2016/17 total wheat exports currently stand at 87 411 tonnes.

Sunflower seed:

Sunflower seed harvesting is virtually over in many parts of the South Africa, with the exception of the areas that planted late in the season, particularly the western parts of the North West province . If weather conditions remain cool and dry within the next two weeks, the harvest process could be over by end of this month.

Fortunately, the recent updates from the weather models present a promising picture of persistent dryness across sunflower seed growing regions within the next two weeks. 

From a global perspective – The EU sunflower seed market had a good run in yesterday’s trade session with a price up by 0.25% from the previous day to S$402 per tonne. This was due to a combination of factors such as strong buying interest for sunflower seed products (oil and meal), as well as spill over support from other vegetable oils markets.

The Black Sea’s sunflower oil market also gained ground with the price up by 0.40% from the previous day, closing at US$754 per tonne. Similar to the EU’s market, these gains were supported by spill over support from other vegetable markets (palm oil).

In terms of production, Kazakhstan’s government forecast the country’s 2017/18 sunflower seed production at 705 000 tonnes, which is 7% lower than the previous season. The expected lower yields are the key drivers of this decline.

RSA Potatoes:

Yesterday the South African potatoes market managed to claw back some of previous day’s losses with support coming from relatively lower stocks of 1.04 million bags (10kg bags). The price was up by 9% from the previous day, closing at R27.04 per bag (10 kg bag).

During the session, the market saw a further decline in deliveries due to slow harvest activity, as well as an increase in buying interest. This subsequently led to a 4% decline in stocks to 995 316 bags (10kg bags).

RSA fruit:

Yesterday the fruit market ended the day mixed.  The apple price was up by 4% from the previous day, closing at R6.91 per kilogramme due to strong buying interest. However, this could be short lived owing to relatively large stocks of 193 889 tonnes, up 24% from the previous day.

Meanwhile, the bananas and oranges prices were down by 5% and 10% from the previous day, closing at R7.69 per kilogramme and R2.79 per kilogramme, respectively. These losses were mainly on the back of relatively large stocks.

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