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 31 341 tonnes in the week ending 13 October 2017, which is a 4% decline from the previous week’s deliveries. About 68% of this was white maize, with 32% being yellow maize.
Overall, South Africa’s 2017/18 total maize deliveries for “week 1 to 24” currently stand at 14.83 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.
On the global front – The weather remains a key factor in the US maize market. The expected rainfall in eastern parts of the Midwest could slow the harvest process this week.
From a demand perspective, the USDA reported a sale of 146 000 tonnes of US maize to an unknown destination. In Addition, the US sold 115 000 tonnes of maize to Mexico.
Elsewhere, IKAR revised its estimate for Russia’s 2017/18 maize production down by 400 000 tonnes from the previous month to 13.5 million tonnes. Moreover, this is 12% lower than the previous season’s harvest due to a reduction in area planted and lower yields in some regions.
Last week’s light showers of between 10 and 20 millimetres in the Southern Cape and Swartland regions of the Western Cape province brought some slight relief, although not sufficient to improve soil moisture and crop conditions.
Most areas in the Southern Cape and Mossel Bay planted late, therefore rainfall in these particular regions could still aid crop development which is at grain filling stages. Unfortunately, the weather forecast for the next two weeks shows a possibility of continued dryness in the Western Cape province, with a possibility of light showers along the coastal areas.
In the region, Ethiopia is still in the market looking for 400 000 tonnes of milling wheat from the optional origin. Not of significance to markets in the near term, but interesting to note is communication from Nigeria’s Agricultural Minister – the country aims to boost its wheat production by 2019 in order to reduce imports.
On the global front – IKAR lifted its estimate for Russia’s 2017/18 wheat production by 1.2 million tonnes from last month to 83.7 million tonnes. This is 15% higher than the previous season’s harvest due to an increase in area planted, as well as expected higher yields.
The weather continues to paint a possibility of rainfall within the next two weeks across the soybean producing regions of the country. Although this could cause planting delays, it will improve soil moisture and benefit the new season crop.
In global markets – This morning the Chicago soybean price was up by 0.31% from levels seen at midday yesterday, with support coming from strong global demand.
The USDA recently reported a sale of 261 000 tonnes of US soybeans to an unknown destination. The world’s leading buyer of soybeans, China, will continue to show solid demand for soybeans this season. The country’s 2017/18 soybean imports are estimated at 95 million tonnes, up by 3% from the previous season.
The South African potato market lost ground in yesterday’s trade session with the price down by 10% from the previous day, closing at R39.72 per pocket (10kg). This was on the back of relatively large stocks of 797 300 pockets (10kg bag).
Moreover, during the session, the market saw an uptick in deliveries as harvest activity picks up after a quiet weekend. This subsequently led to an 18% increase in daily stocks to 937 285 pockets (10kg bag).
The fruit market ended the day mixed during yesterday’s trade session. The prices of apples and oranges were each up by 6% from the previous day, closing at R7.59 and R5.69 per kilogram, respectively. These gains were due to relatively lower stocks of 222 487 tonnes of apples and 54 428 tonnes of oranges.
Meanwhile, the bananas market lost 3% from the previous day, closing at R6.38 per kilogram due to strong commercial selling. Moreover, the relatively large stock of 254 692 tonnes also added pressure to the bananas market.
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