Highlights in today’s morning note
Although the focus is in the new production season, some farmers continue to deliver old season maize to commercial silos. The total maize deliveries were reported at 14 937 tonnes in the week ending 03 November 2017, which is 70% lower than the previous week’s deliveries. About 65% of this was white maize, with 35% being yellow maize.
Overall, South Africa’s 2017/18 total maize deliveries for “week 1 to 27” currently stand at 14.93 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.
The weather forecast has changed overnight and currently shows a possibility of between 20 and 35 millimetres of rainfall across the Western Cape province within the next eight days. This could cause harvest delays in areas that have already started with the process.
However, dry and cool conditions should return in the week ending 24 November 2017 and possibly accelerate the harvest process across the Western Cape province.
Apart from the aforementioned challenges, the expected rainfall is a welcome development given that the Western Cape province’s dam levels are critically low. The most recent update for the week ending 06 November 2017 shows that dams averaged 36%, down by 1% from the previous week and 23% lower than the corresponding period last year.
In areas that planted early in the season, farmers have made notable progress regarding the harvest activity. About 54 718 tonnes of wheat was brought to commercial silos in the week ending 03 November 2017. This placed the country’s producer deliveries for “week 1 to 5” of the 2017/18 marketing season at 127 032 tonnes.
The soybean growing areas of South Africa could receive good showers within the next eight days, which is conducive for the 2017/18 production season. As indicated in our previous notes, South African farmers intend to plant 720 000 hectares of soybean this season – largest on record.
In global markets – Today, the primary focus is on the USDA’s World Agricultural Supply and Demand Estimates report, which is expected to show a lower US soybean yield estimate. This follows reports of relatively lower yields in some areas of the Midwest. Last month, the agency estimated the US 2017/18 soybean production at 121 million tonnes, up by 3% from the previous season.
Elsewhere, the soybean planting in central Brazil is advancing following recent rains with further precipitation expected in the next week. Looking ahead, there are still fears that drier conditions may return in South America, ahead of a potential La Niña early 2018.
Abiove, Brazil’s industry association, revised its 2017/18 soybean production estimate up by 300 000 tonnes from the previous month to 108.8 million tonnes. This is slightly above the USDA’s estimate of 107.0 million tonnes. Overall, this is 5% lower than the previous season’s harvest.
Yesterday the South African potato market lost ground with the price down by 6% from the previous day, closing at R35.54 per pocket (10kg). These losses were due to large stocks of 874 777 pockets (10kg bag) at the beginning of the session.
Moreover, during the session, the market saw a further uptick in deliveries on the back of ongoing harvest activity. This led to a 13% increase in daily stocks to 991 099 pockets (10kg bag).
The fruit market saw widespread gains in yesterday’s trade session due to a combination of factors, such as lower stocks and strong commercial buying, amongst others. The price of apples was up by 2% from the previous day, closing at R7.93 per kilogram. This followed a 31% decline in daily stocks to 190 000 tonnes.
The prices of bananas and oranges were up by 3% and 7% from the previous day, closing at R7.85 and R6.86 per kilogram, respectively. These gains followed a 37% and 54% decline in stocks of bananas and oranges to 173 000 tonnes and 42 000 tonnes, respectively.
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