Agbiz Morning Market Viewpoint on Agri-Commodities: 29 March 2017

South Africa could harvest the second biggest maize crop on record
March 29, 2017
South Africa looks to revive wheat industry
March 29, 2017

Agbiz Morning Market Viewpoint on Agri-Commodities: 29 March 2017



The National Crop Estimate Committee has cemented the prospects of a bumper crop this year, placing its second production estimate for South Africa’s maize crop at 14.32 million tonnes, which is a 3% uptick from the previous estimate and 84% increase from the previous season. More importantly, this is the second largest production estimate on record after the 1980/81 bumper crop of 14.66 million tonnes.

More specifically, white and yellow maize production estimates were revised up by 2% and 4% from the previous estimates to 8.5 million tonnes and 5.8 million tonnes, respectively. This is largely on the back of an increase in area plantings, as well as expected higher yields on the back of favourable weather conditions.

From a trade perspective, although South Africa is set to regain its status as a net exporter of maize in 2017/18 marketing year, the country remains a net importer of maize in the 2016/17 marketing year, which ends on the 30 April 2017. In the week that ended on 24 March 2017, South Africa imported 11 742 tonnes of maize. About 95% was white maize and 5% was yellow maize, all from the US. Overall, South Africa’s 2016/17 total maize imports stand at 2.24 million tonnes, which is 94% of the seasonal import forecast.

In the same week, South Africa exported 16 361 tonnes of maize to regional markets (Africa), with 74% share being white maize and 26% being yellow maize. South Africa’s 2016/17 total maize exports currently stand at 727 914 tonnes (62% is white maize and 38% is yellow maize). Looking ahead, South Africa’s 2017/18 total maize exports are estimated at 2.5 million tonnes. About 56% of this is set to be white maize and 44% to be yellow maize. This comes on the back of an expected rebound in domestic production.



Recent communication from the South African Weather Services provided some comfort in the wheat producing areas. The report indicated that there is a likelihood of above-normal rainfall for late autumn to mid-winter (June-July-August). If this materialises, it would benefit the winter wheat growing areas.

From a trade perspective, this was a quiet week, with no imports reported. The last imports were in the week that ended on 10 March 2017, coming in at 33 699 tonnes, all from Germany. This is 49% lower than the previous week’s imports. Overall, South Africa’s 2016/17 total wheat imports stand at 390 550 tonnes, which is 26% 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 24 March 2017, total exports reached 2 698 tonnes, all went to regional markets. Overall, South Africa’s 2016/17 total wheat exports currently stand at 49 812 tonnes. About 42% of this went to Zimbabwe, 9% to Namibia, 9% to Botswana, 25% to Lesotho, 6% to Mozambique, 6% to Zambia and 3% to Swaziland.

Elsewhere, India imposed a 10% import tariff on wheat with immediate effect. The Ministry of Agriculture staff indicates that this is a desire to protect local producers against imports when the harvesting season starts. India’s 2016/17 wheat production is estimated at 86 million tonnes, down by 1% from the previous season.



Recent data from National Crop Estimate shows that South Africa’s soybean crop be the biggest on record, estimated at 1.16 million tonnes. This is 9% higher than the previous estimate and 57% higher than the previous season. This is on the back of an increase in area plantings, as well as expected higher yields.

The key producing provinces are Mpumalanga, Free State and Gauteng, with production estimated at 482 000 tonnes, 444 000 tonnes and 63 500 tonnes, respectively.

Given this recovery, we expect South Africa to be a net exporter of soybean this season. We do not foresee any imports and this will be a notable improvement after 2016/17 soybean imports reached 271 098 tonnes. About 97% came from Paraguay and the rest from Zambia, Ethiopia and Nigeria.

In global markets – this morning Chicago soybean price was down by 0.31% from the level seen at midday yesterday due to prospects of large global supplies and expectations of an increase in US soybean plantings in the new season.

The focus in the market is in Friday’s USDA report which will show US 2017/18 soybean sowings, as well as updated stocks figures.  A number of analysts expect the soybean area to increase by at least 6% from the previous season to levels above 35 million hectares. Alledale Inc and FC Stone have pencilled 35.9 million hectares and 35.3 million hectares for US 2017/18 soybean plantings, respectively. This is likely to be at an expense of maize area plantings.

Sunflower seed:


Recent data from the National Crop Estimate Committee shows that South Africa’s sunflower seed production was revised down from the previous estimate of 928 620 tonnes to 896 060 tonnes. This was due to expectations of relatively lower yields.

Despite these downward revisions of crop estimates, South Africa’s sunflower seed market is well supplied. The ending stocks were recorded at 162 439 tonnes in February 2017, which is treble the volume seen the in the corresponding period last year.

In global markets – yesterday the EU’s sunflower seed market gained ground from the previous day’s level, with the price up by 0.74% from the previous day, closing at US$407 per tonne. These gains were mainly on the back of strong buying interest.  More on the bullish note, analysts such as Coceral forecast the EU’s 2017/18 sunflower seed production at 8.3 million tonnes, slightly below this season’s crop of 8.5 million tonnes.

SA beef:


Yesterday the SAFEX beef market saw further gains, with price up by 0.23% from the previous day’s level, closing at R44.50 per kilogramme. This mainly on the back of an increase in volumes traded on the stock exchange.

Moreover, the slaughtering activity shows a slowing trend which suggests that farmers have started restocking their herds. This comes after recent rainfall led to a notable improvement in grazing fields, as well as relatively lower feed costs. Data from the Red Meat Levy Admin shows that in January 2017, South African farmers slaughtered 227 483 head of cattle, which is 28% lower than the previous month.

In the week ending 13 March 2017, slaughtering weekly activity was at 13 013 head of cattle which is 19% lower than the corresponding period last year . All of this adds bullish pressure to the market.



Yesterday the South African potatoes market gained ground and closed in positive territory, owing to relatively lower stock levels.  At the start of the session, the stocks were estimated at 850 392 bags (10 kg bags), down by 27% from the previous day, following slow activity during the weekend. 

However, during the session, the market saw some boost in deliveries and that led to an 18% uptick in deliveries to 1 003 670 bags (10 kg bags).

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