Sub-Saharan Africa’s 2017/18 wheat imports up by 18% y/y

• Drier and warm weather conditions have kept the US wheat on the back foot. On 08 April 2018, farmers had planted only 2 percent of the intended area for spring wheat, well below the area planted at the corresponding period last year, according to data from the USDA. These delays were mainly caused by persistent dryness in some States.
• At the same time, the US winter wheat crop conditions were rated at 30 percent good/excellent, which is 23 percentage points lower than the same period last year. This too was largely due to persistent dryness in winter wheat growing areas. The USDA will release an update of US crop conditions later today. It is most likely that there is marginal progress from the aforementioned rates, as a large part of last week was mostly dry and cool in US wheat growing areas. The improvements could be seen if the expected rainfall this week materialises.
• From a global perspective, the wheat market is well supplied. Last week, the USDA placed its 2017/18 global wheat production at 758 million tonnes, up by a percentage point from the previous season. At the same time, the ending stock was estimated at 271 million tonnes, up by 6 percent from the 2016/17 season.
• This means that key wheat importing regions such as North Africa, Middle East and sub-Saharan Africa, amongst others, will be well supplied in the 2017/18 season, despite the decline in production in countries such as the US, Canada and Australia. The uptick in global supplies is boosted by a large harvest in Russia and India. The USDA forecasts sub-Saharan Africa’s 2017/18 wheat production at 26 million tonnes, up by 18 percent from the previous season. This equates to a 14 percent share of global wheat imports (see Chart below).

Chart: Global wheat imports

Source: USDA, Agbiz Research   

Full article by Wandile Sihlobo in attatchment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 16 April 2018