Highlights in today’s morning note
South Africa’s average dam levels: week ended 22 January 2018 (last year’s figures in brackets – 22 January 2017)
Source: Department of Water and Sanitation and Agbiz Research
There is still uncertainty about the area planted to maize this season due to delays caused by dryness. The most recent poll of analysts from Reuters suggested that South Africa’s 2017/18 maize hectares could decline by 18% from the previous season to 2.16 million hectares (the range of area planted estimates was 1.91 million hectares and 2.43 million hectares).
Moreover, this is 13% lower than the farmers’ intentions that were released in October 2017. About 1.15 million hectares are set to be white maize, with 1.01 million hectares being yellow maize. The official preliminary planting data will be released tomorrowafternoon.
In the past few weeks, the South African maize market did not show notable gains, despite reports of unfavourable weather conditions in the central and western parts of the country. This can be explained by large stocks which stood at 7.3 million tonnes in December 2017. This is 141% higher than the corresponding period the previous year. About 65% of the stock was white maize with 35% being yellow maize.
Also worth noting is that South Africa utilised 830 816 tonnes of maize in December 2017, down by 12% from the previous month, but up by 6% from December 2016. About 63% of total maize utilised last month was white maize, with 37% being yellow maize.
After experiencing dry and warm weather conditions in the past few weeks, the sunflower seed growing areas of the Free State and North West provinces received scattered showers on last week. However, this was not sufficient to fully replenish soil moisture, a boost in precipitation is needed this week and in early February in order to reduce heat stress and support crops in areas that managed to plant.
Apart from the aforementioned developments, South Africa’s sunflower seed market is still well supplied. The ending stocks were recorded at 311 316 tonnes in December 2017, up by 21% from the corresponding period the previous year.
At the same time, South Africa’s sunflower seed consumption (crushed oil and cake) declined by 32% month-on-month to 61 179 tonnes. However, this was 36% higher than the volume utilised in December 2016.
In terms of trade, there were no exports last month. The last exports were in November 2017, recorded at 42 tonnes, all destined to Namibia. This placed South Africa’s 2017/18 sunflower seed exports at 168 tonnes. About 49% went to Swaziland, 38% to Namibia and 13% to Botswana.
In the same month, South Africa imported 23 tonnes of sunflower seed from the United Kingdom, the first consignment since November 2016. The total imports for the 2017/18 marketing season currently stand at 535 tonnes, which equals to 97% of the seasonal import forecast. Moreover, this is well below last season’s imports of 70 643 tonnes, thanks to a large production volume in the 2016/17 season.
One of the reasons South Africa’s soybean prices remained at relatively lower levels despite the heat wave in the past few days is because the country is still well supplied for the near, thanks to a record harvest of 1.32 million tonnes in the 2016/17 production season.
Last month, South Africa’s soybean stocks were at 512 090 tonnes, which is treble the volume seen in December 2016. Also worth noting is that soybean consumption (crushed oil and cake) was at 65 798 tonnes in December 2017, down by 31% from the previous month due to reduced working days over the Christmas holidays. With that said, this was 7% higher than the volume utilised in December 2016.
The large soybean harvest implies that South Africa could receive minimal imports this marketing season, which will be a remarkable improvement following imports of 271 098 tonnes last season. The country imported 436 tonnes of soybean in December 2017, which is well below the previous month volume of 1 324 tonnes. This placed the country’s total soybean imports to 26 858 tonnes, which equals to 96% of seasonal import forecast.
There were no exports last month. The last exported volume was one tonne in November 2017, destined to Botswana. South Africa’s 2017/18 soybean total exports currently stand at 412 tonnes. With that said, the country’s seasonal soybean exports are estimated at 30 000 tonnes.
The South African potatoes market lost ground in Friday’s trade session owing to a large stock of 908 547 pockets (10kg bag) at the start of the session. The price was down by 1.36% from the previous day, closing at R37.70 per pocket (10kg).
Moreover, in the session, the market saw an uptick in deliveries on the back of ongoing harvest activity. This subsequently led to a 6% increase in daily stocks to 966 727 pockets (10kg bag).
The fruit market was under pressure in Friday’s trade session due to commercial selling. The prices of apples and bananas were down by 2% and 6% from the previous day, closing at R8.54 per kilogram and R5.55 per kilogram, respectively. At the same time, the price of oranges declined by 4% from the previous day and settled at R4.39 per kilogram.
Nonetheless, these losses should soon be revered due to lower stocks. On Friday, apples, bananas and oranges daily stocks respectively declined by 38%, 16% and 69% from the previous day, and closed at 95 000 tonnes, 205 000 tonnes and 11 000 tonnes.
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