Highlights in today’s morning note
Monday’s showers in the South African maize were very light and scattered, varying between 09 and 25 millimetres. The main towns that received these drops were Vrede, Frankfort, Bloemfontein, Bultfontein, De Brug, Viljoenskroon, Potchefstroom, Ventersdorp, Amersfoort, Delmas, Ermelo, Hendrina, Kriel, Middelburg, Morgenzon and Wonderfontein.
With that said, the forecast for the next two weeks promises rainfall of over 50 millimetres, which should improve soil moisture and subsequently benefit the new season crop.
From a trade perspective, South Africa exported 20 987 tonnes of maize in the week ending 19 January 2018, well below the previous week’s volume of 49 053 tonnes. About 64% of these exports were yellow maize, with 36% being white maize.
The leading buyer was Japan with a share of 48%, mainly yellow maize. Trailing Japan was Namibia with a share of 12%. This placed South Africa’s 2017/18 maize marketing year exports at 1.8 million tonnes, which equates to 82% of the season’s export forecast of 2.2 million tonnes. About 69% of the exported 1.8 million tonnes is yellow maize, with 31% being white maize.
South Africa continues to import large volumes of wheat in order to meet the domestic needs. The country imported 44 450 tonnes of wheat in the week ending 19 January 2018, all from Argentina. This is well above the previous week’s imports of 10 007 tonnes. This placed 2017/18 marketing year’s wheat imports at 679 136 tonnes, which equates to 36% of the seasonal import forecast of 1.9 million tonnes .
Not of importance, but interesting to note is that Argentina has thus far been the sole supplier of wheat to South Africa in 2018, with a total volume of 54 457 tonnes. With that said, when viewing the 2017/18 total wheat imports, Russia is in the lead with 43% share. Trailing Russia is Ukraine with 18% share, then Lithuania with 13%, Argentina with 11%, the United States with 8% and Romania with 7% share.
Although a net importer of wheat, South Africa continues to export wheat to regional markets. The 13th batch of exports this season was recorded at 101 tonnes, all destined to Lesotho. This placed total wheat exports for 2017/18 marketing year at 4 831 tonnes.
From a regional perspective, Sub-Saharan Africa’s 2017/18 wheat imports are set to reach 22.6 million tonnes, up by 10% from the previous season. The uptick is driven by both expected decline in domestic production, as well as an uptick in consumption.
Nigeria, Sudan, Kenya, South Africa and Ethiopia are expected to be the key importers with a combined share of 56% in the expected imports of 22.6 million tonnes. With that said, Nigeria takes a lion share of 23% of Sub-Saharan wheat imports. In fact, the country’s wheat imports have grown from levels of 4.3 million tonnes in the 2014/15 season to an expected 5.1 million tonnes in the 2017/18 season.
On Monday, Frankfort, Harrismith, Kroonstad, Marquard, Theunessen, Vrede, Amersfoort, Delmas, Ermelo, Hendrina, Kriel, Middelburg, Morgenzon and Wonderfontein towns of eastern Free State and Mpumalanga provinces received light showers of between 09 and 25 millimetres.
Moreover, South Africa will experience a boost in precipitation over the next two weeks which will improve soil and soybean crop conditions after weeks of prolonged dryness. The preliminary plantings data that is due for release at the end of this month will give an indication of the potential size of the harvest. At the beginning of the season, farmers planned to plant 720 000 hectares of soybeans. The eastern regions planted successfully, but experienced crop damage in some areas due to unfavourable weather conditions. Nevertheless, the crop is generally in good shape.
Above all, South Africa is well supplied in the short to medium term, thanks to a record harvest from the 2016/17 production season. Moreover, the 2018/19 marketing year will commence in March 2018 with a solid opening stock of 309 862 tonnes, which is treble the volume seen in the previous season.
Yesterday the South African potatoes market managed to claw back its recent losses, as lower stocks of 523 903 pockets (10kg bag) at the beginning of the session provided support. The price was up by 10% from the previous day, closing at R40.21 per pocket (10kg).
However, during the session, the market saw an uptick in deliveries as harvest activity picks up after a quiet period over the weekend. This led to a 26% increase in daily stocks to 658 456 pockets (10kg bag).
The fruit market had a good run in yesterday’s trade session with relatively lower stocks underpinning the market. The price of apples was up by 10% from the previous day, closing at R8.25 per kilogram. This followed a 4% decline in daily stock to 138 000 tonnes.
Additionally, the prices of bananas and oranges were up by 21% and 2% from the previous day, closing at R6.19 per kilogram and R5.11 per kilogram, respectively. These gains were on the back of relatively lower stocks of 257 000 tonnes of bananas and 16 000 tonnes of oranges.
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