Highlights in today’s morning note
The beef market is slowly showing signs of normalisation after the 2015-16 El Nino-induced drought. Data from the Red Meat Levy Admin shows that South African farmers slaughtered 203 983 head of cattle in June 2017, up by 1% from the previous month. With that said, this is still 16% lower than the corresponding period last year (drought year with higher slaughtering rate). We will monitor the developments closely to determine the impact on prices.
The wheat crop is generally not in good shape due to persistent dryness in the Western Cape Province. The first part of last week was dry and warm across the province, but toward the end of the week, the Swartland region received showers of between 10 and 20 millimetres.
Most areas of the country have already completed the harvest process. The ones that have not yet finished could get momentum from the expected drier and cool weather conditions within the next two weeks.
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The domestic soybean data calendar is light this week, therefore the market performance will largely be guided by the Chicago (soybean) price and domestic currency movements throughout the week.
From a global perspective – The USDA forecasts 2017/18 global sunflower seed production at 47.3 million tonnes, up 2% from the previous season. The uptick is due to expected large harvest in Russia, Turkey, Ukraine and the EU countries.
The South African potatoes market saw marginal gains in Friday’s trade session with the price up by 0.24% from the previous day, closing at R28.91 per pocket (10kg). These gains came on the back of relatively lower stocks in the market.
The fruit market ended the day mixed on Friday’s trade session. The price of bananas was up by 3% from the previous day, closing at R5.95 per tonne due to strong buying interest. Meanwhile, the prices of apples and oranges fell by 1% and 15% from the previous day, closing at R7.31 per kilogramme and R2.90 per kilogramme, respectively.