Boost in sunflower seed planting activity expected due to favourable weather

Highlights in today’s morning note

 

Maize:

 

The South African maize belt could receive widespread rainfall within the next two weeks, which should improve soil moisture and later support the new season crop. However, this could slow the planting process which might be an issue for the eastern parts of the country where the optimal planting window closes around mid-November. These are areas that typically produce yellow maize. 

 

With that said, the expected rainfall will not be an issue for the western parts of the maize-belt, where the optimal planting window only closes around mid-December. These are areas that typically produce white maize.

 

On the global front – On 05 November 2017, about 70% of the US maize crop had already been harvested, which is 14% behind the same period last year. The delays were partly due to unfavourable weather conditions in the past few weeks.

 

The eastern parts of the US Midwest should receive rainfall within the next two weeks. Although this is a welcome development for crops such as winter wheat, the maize crop could experience harvest delays. This is not ideal as the crop is already behind last year’s pace.

 

The US 2017/18 maize production is estimated at 363 million tonnes, down by 6% from the previous season due to a decline in area planted and lower yields in some areas of the Midwest.

 

Wheat:

 

The expected drier weather conditions within the next two weeks across the Western Cape province should support the wheat harvest process. The yields in an area that have already harvested have been disappointing, which is somewhat unsurprising given that weather conditions have been unfavourable throughout the season.

 

In North Africa, wheat demand remains solid. The International Grains Council forecasts Egypt’s 2017/18 all-wheat imports at 12.1 million tonnes, up by 7% from the previous season. This is on the back of growing local demand. The country’s 2017/18 wheat production is estimated at 8.6 million tonnes, unchanged from the previous season.

 

On the global front – The eastern parts of the US Midwest should receive good rainfall within the next two weeks, which will benefit the winter wheat crop. On the 05 November 2017, about 91% of the US wheat crop had already been planted, which is one percentage point ahead of the corresponding period last year.

 

In addition, about 75% of the planted crop has already emerged which is three percentage points behind the corresponding period last year. The International Grains Council forecasts the US 2017/18 all-wheat production at 47 million tonnes, down by 25% from the previous season due to a decline in area plantings and expected lower yields in some areas.

 

Sunflower seed:

 

The weather outlook remains favourable in the central and western parts of the North West province, with prospects of dry and cool conditions within the next eight days. This should boost the planting activity.

 

The North West province is a second largest producer of sunflower seed in the country with the intended area plantings estimated at 222 000 hectares in the 2017/18 production season. This is roughly a third of the national sunflower seed hectares. Moreover, this is 6% higher than the previous season due to an expected switch from white maize hectares owing to better profitability.

 

In the global market – The harvest activity is virtually over in the Black Sea region. On 06 November 2017, Russia and Ukraine had harvested 70% and 97% of this season’s sunflower seed crop, respectively.

 

Also worth noting is that SUNSEEDAN forecasts Russia and Ukraine’s 2017/18 sunflower seed production at 14.0 and 11.5 million tonnes, which is a 3% y/y and 2% y/y decline, respectively.

 

Elsewhere, the harvest process is also underway in the US. At the beginning of this week, about 70% of the area had already been harvested. This is eight percentage points behind the corresponding period last year. The delays are largely due to wet weather conditions in some parts of the Midwest.

 

RSA Potatoes:

 

The South African potato market lost ground in yesterday’s trade session with the price down by 1% from the previous day, closing at R37.30 per pocket (10kg). This was mainly due to large stocks of 1.12 million pockets (10kg bag) at the start of the trading session.

 

However, during the session, the market saw strong commercial buying interest, coupled with a decline in deliveries on the back of slow harvest activity over the weekend. This led to a 24% decrease in daily stocks to 846 048 pockets (10kg bag).

 

RSA fruit:

 

The fruit prices were mixed in yesterday’s trade session. The price of bananas was down by 4.3% from the previous day, closing at R7.56 per kilogram. These losses were mainly on the back of large stocks of 265 412 tonnes.

 

Meanwhile, the prices of apples and oranges were up by 0.1% and 15.5% from the previous day, closing at R6.92 and R6.47 per kilogram, respectively. These gains were partially on the back of commercial buying interest. However, this could be short-lived due to higher deliveries which have lifted stocks to 311 756 tonnes of apples and 51 273 tonnes of oranges.

 

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Agbiz Morning Market Viewpoint on Agri-Commodities – 07 November 2017