Agbiz Morning Market Viewpoint on Agri-Commodities: 22 February 2017

Agbiz Morning Market Viewpoint on Agri-Commodities: 21 February 2017
February 21, 2017
SA’s bread and maize meal production painted a mixed picture in December 2016
February 23, 2017

Agbiz Morning Market Viewpoint on Agri-Commodities: 22 February 2017

Highlights in today’s morning note


South Africa’s maize growing areas continue to receive high rainfall, and the forecasts suggest that this could persist for the next two weeks. Although rain is essential for crop growing conditions, there is an emerging fear that too much of it could cause complications, especially for crops that are still at early growing stages and the ones nearing maturation stages.

Trade perspective – this was a fairly quiet week, with relatively small volumes imported. In the week ending 17 February 2017, South Africa’s maize imports came in at 12 193 tonnes all yellow maize from Ukraine. This placed South Africa’s 2016/17 yellow maize imports at 1.29 million tonnes – 75% of the seasonal import forecast. Moreover, South Africa’s 2016/17 white maize imports stand at 670 501 tonnes – 89% of the seasonal import forecast. Overall, South Africa’s 2016/17 total maize imports stand at 1.96 million tonnes, which is 79% of the seasonal import forecast.

In the same week, South Africa exported 12 358 tonnes of maize to regional markets (Africa), with 56% share being white maize and 44% being yellow maize. South Africa’s 2016/17 total maize exports currently stand at 644 061 tonnes (61% is white maize and 39% is yellow maize).

Regionally, meanwhile South Africa is experiencing high rainfall, the Kenyan farmers have been battling with drought, as a result, the government will allow non-GM yellow maize imports of 450 000 tonnes duty-free within the next three to four months.


There was an uptick in trade activity, with recent figures showing that South Africa’s wheat imports for the week ending 17 February 2017 reached 36 668 tonnes. About 52% was from Germany, 27% from Poland and 21% from Canada. This is double the volume imported the previous week. Overall, South Africa’s 2016/17 total wheat imports stand at 240 183 tonnes, which is 16% of the seasonal import forecast (1.5 million tonnes).

Although a net importer of wheat, South Africa continues to export wheat to regional markets. In the week ending 17 February 2017, total exports reached 3 766 tonnes, all went to regional markets (Africa). Overall, South Africa’s 2016/17 total wheat exports currently stand at 35 612 tonnes. About 56% of this went to Zimbabwe, 11% to Namibia, 8% to Botswana, 12% to Lesotho, 9% to Mozambique, and 4% to Swaziland.


In global markets – this morning Chicago soybean price was down by 1.06% from the level seen at midday yesterday, owing to growing optimism about the US 2017/18 soybean crop. The USDA placed its area plantings forecast at 85.5 million acres, which is up by 3% from the previous season. Informa Economics is even more optimistic, placing the US 2017/18 area plantings estimate at 90.49 million acres, up by 9% from the previous season.

With ongoing rainfall in most parts of South America, the region remains a key focus in the global market. There are still mixed views about the effects of wet weather conditions Argentina. On the one hand, some analysts worry that these conditions could lead to yield losses, while others view is that this could be positive in replenishing soil moisture and improving crop conditions.

The recent estimates from the Buenos Aires Grains Exchange placed Argentina’s 2016/17 soybean crop at 54.8 million tonnes, which is 7% lower than the previous season.


In global markets – the EU’s sunflower seed market was under pressure, with prices down by 0.48% from the previous day’s level, closing at US$418 per tonne. Fundamentally, there hasn’t been any major shifts in the EU sunflower seed market. The bearish pressure stems from higher domestic supplies, with the 2016/17 crop estimated at 8.6 million tonnes, which is 6% higher than the previous season’s crop.

In South America, ongoing rainfall in Argentina has slowed harvest process. On the 21st February 2017, Argentina’s sunflower seed harvest was still at 39% complete, according to data from Sunseedman. The weather forecasts show that rainfall could possibly continue for the remainder of this week.


The current rainfall has slowed harvest activity or producer deliveries in the potatoes market. This is illustrated by lower stock levels that were seen at the start of yesterday’s trade session. As a result, the market found support on these developments, with prices up by 36.33% in yesterday’s trade session (compared to the previous day) to R37.04 per bag (10 kilogrammes).

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