agricultural commodities – Agri Limpopo

South African Agricultural Commodities Weekly Wrap

Deidre Carter — Fri, 06 Jul 2018 06:54:14 +0000

This was a fairly quiet week in the South African agricultural market, with maize and soybean prices closing on in negative territory, whereas wheat and sunflower seed prices maintained the previous week’s gains.
The price movements can partly be explained by variation in production expectations. Maize and soybean production forecasts have been revised up from levels seen in May 2018, hence boosting local supplies and subsequently adding pressure to the market. Meanwhile, sunflower seed production estimates were left unchanged in the latest revision.
Aside from price movements, the harvest process is in full swing across the country and the yield reports from farmers have largely been positive.
Looking ahead, the weather will be a key focus within the next couple of weeks as it continues to influence the harvest activity of summer crops and growing conditions of new season winter crops.
Apart from grain and oilseed markets, the SAFEX beef carcass market experienced a quiet week with prices unchanged from levels seen last week. In terms of the beef supply, the South African farmers slaughtered 219 434 head of cattle in May 2018, up by 11 percent from the previous month.

Click HERE to read the full report by Wandile Sihlobo

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The next eight days could bring good showers over SA wheat growing areas

Deidre Carter — Mon, 03 Sep 2018 10:08:32 +0000

The Western Cape is the only province with a large share of dryland wheat and therefore prone to weather risks. Fortunately, the weather conditions have been quite favourable this year, with a fair amount of rainfall over most parts of the province. The only winter wheat growing area that did not receive an adequate amount of rainfall is the southern Cape, hence there have been reports of crop damages.
Looking ahead, the next eight days could bring heavy rainfall of between 20 and 70 millimetres over the Western Cape province. This is a welcome development as the crop is at the pollination stage of development that requires moisture. Nonetheless, the areas that had already experienced crop damage in the southern Cape regions might not be able to recover at this stage.
The expected rainfall will not only improve soil moisture and benefit crops but also improve dam levels. The most recent data from the Department of Water and Sanitation shows that the Western Cape provincial dam levels averaged 55 percent in the week of 27 August 2018, up by a percentage point from the previous week and 22 percentage points higher than the same period last year.
Furthermore, the forecast rainfall is not only limited to the Western Cape but also other winter wheat producing provinces, with the exception of Limpopo which could experience cool and drier weather conditions over the observed period. This is not much of concerns as the irrigation areas of the province could benefit from higher dam levels (see Figure 1).
The favourable weather outlook supports the Crop Estimate Committee’s view of an 18 percent annual recovery in wheat production to 1.8 million tonnes. Most importantly, as a result of an uptick in domestic production, wheat imports could decline by 33 percent from the 2017/18 season to 1.4 million tonnes. This is according to data from the national Supply and Demand Estimate Committee.

Click HERE to read the full report

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Spotlight on soybean market

Arithmus — Tue, 23 Oct 2018 08:04:07 +0000

Following good gains at the end of last week, the SAFEX soybean market pulled back in yesterday’s trade session and settled at R4 602 per tonne (spot price). This was underpinned by a combination of factors, which include the spillover from lower Chicago soybean prices and a relatively stronger rand against the US dollar, amongst others.
The losses in the Chicago soybean market were driven by reports of a cancellation of 180 000 tonnes of US soybeans sale to China. This could be linked to the lingering trade tension between the two countries, which have resulted in the introduction of retaliatory tariffs by China on US soybean. Last week, the US government indicated that the talks there were underway, in an effort to resolve the dispute, had been put on hold for now.
We place more emphasis on this because China is a dominant player in the global soybean market. In fact, China’s 2018/19 soybean imports are estimated at 94 million tonnes, unchanged from the previous season. This equates to 61 percent of global soybean import estimate for the season.
Given the aforementioned trade dispute, Brazil is likely to the key supplier of soybeans to China in the 2018/19 season. This will not be the first time, as 66 percent of Chinese soybean imports, last year originated from Brazil with 29 percent from the US and the rest from other countries.
Worth noting, however, is that Brazil’s dominance in the Chinese soybean market didn’t only start in the 2017/18 season, it has been the case as far back as 2011/12 season. But the current trade tension between the US and China has exacerbated the situation, lessening the US presence in the Chinese soybean market.
Fortunately for Brazil, this all happens at a time where the country has been receiving good soybean harvests – all thanks to favourable weather conditions. Earlier this month, estimates from the USDA showed that Brazil’s 2018/19 soybean production could amount to 121 million tonnes, up by a percentage point from the previous season. The forecast El Niño that typically leads to drier weather conditions in Southern Africa and other regions has an opposite effect in Brazil and other South American countries, which is higher rainfall. This could boost yields in the new season. The planting activity is currently in full swing in the country, with 34 percent of the area already planted on 18 October 2018, according to data from AgRural.

Click HERE for the full report.

Sourced: Agbiz Morning Market Viewpoint on Agri-Commodities

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South African Agricultural Commodities Weekly Wrap

Arithmus — Fri, 16 Nov 2018 08:48:31 +0000

In the absence of major data releases, the weather was again a primary focus in the South African grain and oilseed market this week. This time around, however, the prospects have turned positive for summer crop areas, with expectations of higher rainfall in the country within the next two weeks. This is good for both areas that are yet to plant as it will improve soil moisture ahead of the process, and also bode well for recently planted areas as it will support the germination process of the crop.
The eastern part of South Africa, which predominantly produce yellow maize and soybeans, have made good progress in terms of planting, whereas the western regions have not started in large areas due to drier conditions in the past few weeks.
In terms of winter crops, the past couple of weeks brought cool and drier weather conditions in the Western Cape, and that supported the harvest process.
Aside from the grain market, the SAFEX beef carcass market experienced a quiet week with prices unchanged from levels seen last week. In terms of the supply, the South African farmers slaughtered 189 108 head of cattle in September 2018, down by 11 percent year-on-year due to the herd rebuilding process after a reduction during the 2015-16 drought.
In the first nine months of this year, the South African farmers slaughtered roughly 1.8 million head of cattle, down by 7 percent from the corresponding period last year.

Click HERE for the full report.

Sourced: Agbiz, Agribusiness Research

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SA food and non-alcoholic beverages inflation unchanged in January 2019

Arithmus — Wed, 20 Feb 2019 14:37:18 +0000

South Africa’s food and non-alcoholic beverages inflation remained unchanged in January 2019 at 3.0% y/y. But we think going forward there will be upside pressures which will emanate from a general increase in agricultural commodity prices, albeit having slowed somewhat from levels seen at the start of the year. The increases will, however, not be steep due to expectations of a decline in meat prices. We think South Africa’s food and non-alcoholic beverages inflation could average about 5% y/y in 2019.
Figures released this morning by Statistics South Africa show that food and non-alcoholic beverages inflation remained unchanged, at 3.0% y/y in January 2019. But the products price inflation movements within the basket were mixed. (See Figure 1). Bread and cereals; fish; vegetables; and non-alcoholic beverages, lifted from the previous month, whilst, meat; milk, eggs and cheese; sugar, sweets and desserts; and other foods price inflation slowed.
To highlight the key products – the deceleration in meat price inflation was partly driven by an increase in slaughtering activity, specifically sheep and cattle subsectors. South African farmers slaughtered 258 697 head of cattle in December 2018, up by 12% from the previous month and 8% from the corresponding period last year. In addition, about 547 952 head of sheep were slaughtered, up by 23% from the previous month, but still a percentage point lower than December 2017. Moreover, meat prices, which account for more than a third of the food inflation basket, are likely to be under pressure in the near term. This is due to expectations of an increase in domestic meat supplies as the recent outbreak of foot-and-mouth disease has led to a ban on South African red meat in key export markets.
In terms of grains and cereals, while the production season started on a bad footing and prices increased notably in January 2019, there has been some improvement in the recent weeks. Crop conditions have generally improved across the country following good rains in the first two weeks of February. The impact of improved weather conditions is illustrated by a widespread decline in SAFEX grain and oilseed prices from levels seen last month. Be that as it may, there is still uncertainty about the potential size of the maize crop. The estimates in the market currently vary between 10.5 and 11.3 million tonnes, which would make the country self-sufficient in the 2019/20 marketing year, when we account for an opening stock. There will be more clarity on this as the season progresses.

Click HERE for the full report.

Sourced: Agbiz, Agribusiness Research

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