Weather:

The most recent weather updates show that a large part of South Africa could receive rainfall of between 20 and 80 millimetres within the next eight days (figure 1). This could benefit the summer crop growing areas, ahead of a planting period which starts around mid-October. Meanwhile, the Western Cape province could receive only light showers of between 7 and 16 millimetres, which will not be sufficient to improve soil moisture.

Maize:

The planting process has already started in some areas around the eastern regions of the country. In addition, the planting window will remain open until mid-November for this particular region.

The western areas will only start planting next month as the planting window opens around mid-November and closes at the end of the year (December). Also worth noting is that the western parts of South Africa predominantly produce white maize and the eastern areas largely produce yellow maize.

However, the upcoming season could potentially bring a slight shift towards oilseed or yellow maize due to price competitiveness of the crops. White maize is likely to remain under pressure for some time due to large supplies and slow exports on the back of weak regional demand.

Wheat:

South Africa imported 24 074 tonnes of wheat in the week ending 29 September 2017, all from the Romania and Ukraine. This is well below the previous week’s import volume of 72 401 tonnes.

Moreover, this was the last batch of imports for the 2016/17 marketing season and overall wheat imports totalled 930 728 tonnes, which is marginally lower than seasonal expectations of 1.0 million tonnes. More importantly, the 2016/17 import volume was the lowest in 10-years. Thanks to a good production harvest in the 2016 season, which boosted the domestic supplies.

However, the 2017/18 marketing season might not be as rosy as the previous one. As indicated in the aforementioned section. The crop is not in good shape in the Western Cape province and that could potentially lead to a downward revision of the current production estimate of 1.7 million tonnes over the coming months.

Even under the assumption that 1.7 million tonnes of production were to materialise, South Africa’s wheat imports could still increase by roughly 77% y/y in the 2017/18 marketing season to 1.65 million tonnes.

While a net importer of wheat, South Africa continues to export wheat to regional markets. The total exports were recorded at 379 tonnes last week, all went to Namibia and Botswana. This brought the country’s 2016/17 total wheat exports to 92 893 tonnes.

Soybeans:

Everything remains the same in the domestic soybean market. The calendar for this week is light, and it is an off-season period with not much activity in the fields. The market performance will largely be guided by the Chicago soybean price and domestic currency movements within the next few days.  

In global markets – This morning the Chicago soybean price was up by 0.10% from levels seen at midday yesterday following a sale of 132 000 tonnes of US soybeans to China.

The weather remains a primary focus in the US soybean market as it could potentially impact the maturation and harvesting process of the crop. The forecast for the next eight days shows a possibility of showers across the north-western parts of the Midwest , which could slow the harvest process in this particular region.

In addition, INTL FCStone lifted its 2017/18 US soybean production estimate to 120.4 million tonnes, which is marginally higher than the International Grains Council’s estimate of 119.5 million tonnes. This is 3% higher than the previous season. The uptick was largely on the back of expected higher yields in most parts of the US.

RSA Potatoes:

The South African potatoes market had a good run in yesterday’s trade session with the price up by 12% from the previous day, closing at R47.30 per pocket (10kg). These gains were partly on the back of lower stocks of 514 069 pockets (10kg bag) at the start of the trading session.

With that said, during the session, the market saw an uptick in deliveries as harvest activity picks up after a weekend. This subsequently led to a 10% increase in daily stocks to 567 467 pockets (10kg bag).

RSA Fruit:

The fruit market saw widespread gains in yesterday’s trade session due to strong commercial buying interest. The prices of apples and bananas were down by 1% and 7% from the previous day, closing at R7.61 per kilogramme and R6.35 per kilogramme, respectively. In addition, the price of oranges was up by 36% from the previous day, closing at R5.34 per kilogramme.

However, the buying interest coincided with an increase in deliveries which boosted the daily stocks of apples and bananas by 33% and 1% to 320 880 tonnes and 280 165 tonnes, respectively.  The oranges stock almost doubled, closing at 11 169 tonnes from the previous day. This essentially means that the current gains in the fruit market could be short-lived.

Click below to read more recent reports by Wandile Sihlobo.

Agbiz Morning Market Viewpoint on Agri-Commodities – 04 October 2017

The post Western Cape crops still in bad shape which could affect current production estimate appeared first on Agri Limpopo.

Maize:

Although the focus in the South African maize market is shifting towards the new production season, some farmers continue to deliver old season maize to commercial silos. The total maize deliveries were reported at 29 753 tonnes in the week ending 29 September 2017, which is a 22% decline from the previous week’s deliveries. About 58% of this was white maize, with 42% being yellow maize.

Overall, South Africa’s 2017/18 total maize deliveries for “week 1 to 22” currently stand at 14.69 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.

The most recent data from the South African Supply and Demand Estimates Committee shows that the country’s 2017/18 total maize supplies are at 17.1 million tonnes. This figure includes opening stock of 1.0 million tonnes, as well as commercial deliveries of 16.1 million tonnes. Overall, this is 40% higher than the previous season’s supplies.

The Committee does not expect any imports this season, whereas exports are set to reach 2.2 million tonnes. One of the key reasons for a relatively lower export estimate is an anticipated weak demand for white maize in the global market. Of the 2.2 million tonnes, white maize exports are set to only reach 870 000 tonnes (or 40%).

In essence, this could lead to a large carry-over stock of roughly 4.4 million tonnes, compared to 1.1 million tonnes in the 2016/17 season. These large stocks could keep maize prices under pressure for some time.

Wheat:

The most recent weather updates show a possibility of continued dryness across the winter wheat growing areas of the Western Cape within the next two weeks which is not conducive for the crop. More concerning is that this could worsen the crop conditions and thus lead to a downward revision of the current national crop estimate of 1.7 million tonnes.

In terms of dam levels – the recent update for the week ending 02 October 2017 shows that dams averaged 36% in the Western Cape province, unchanged from the previous week, but 26% lower than the corresponding period last year.

The most recent data from the South African Supply and Demand Estimate Committee suggests that the country’s wheat imports could increase by 94% year-on-year in the 2017/18 season to 1.8 million tonnes due to expected lower supplies.

Under this scenario, the committee assumes that production could reach 1.7 million tonnes. Therefore, in an event that production declines further, as we expect, the import estimate of 1.8 million tonnes could be revised up over the coming months. We will closely monitor these developments in order to ascertain the impact on prices.

Soybeans:

South Africa’s soybean supplies could reach 1.32 million tonnes in the 2017/18 season . This includes an opening stock of 84 792 tonnes for this season, commercial deliveries of 1.28 million tonnes and a small volume of imports. This is 27% higher than the previous season’s supplies due to large deliveries.

Moreover, the total domestic demand is projected at 1.16 million tonnes, up by 17% from the previous season. This includes 950 000 tonnes of soybean for crush for oil and meal (oil cake), with the remainder set to be utilised in the production of other products.

This also includes a 30 000 tonnes for the export market, which is well above the 2016/17 season’s exports of 6 745 tonnes. Last month, the country exported 99 tonnes of soybean, all went to Mozambique. In total, South Africa’s 2016/17 soybean total exports currently stand at 411 tonnes.

Apart from the aforementioned developments, the calendar for this week is light, and it is an off-season period with not much activity in the fields. The market performance will largely be guided by the Chicago soybean price and domestic currency movements within the next few days.

Sunflower seed:

The most recent data from the South African Supply and Demand Estimates Committee shows that the country’s sunflower seed supplies for the 2017/18 season could reach 1.05 million tonnes. This includes an opening stock of 163 086 tonnes for this season, commercial deliveries of 874 595 million tonnes and a small volume of imports. Overall, this is 18% higher than the previous season.

Moreover, the domestic demand is projected at 819 100 tonnes, up by 14% from the previous season. This includes 800 000 tonnes of sunflower seed for crush for oil and meal (oil cake), with the remainder set to be utilised in the production of other products.

This also includes a 300 tonnes for the export market, which is well above the 2016/17 season’s exports of 205 tonnes. So far, the country has only exported 121 tonnes of soybeans to regional markets.

RSA Potatoes:

The South African potatoes market lost ground in yesterday’s trade session with the price down by 1.27% from the previous day, closing at R46.70 per pocket (10kg). These losses were largely on the back of a recovery in stocks to 567 467 pockets (10kg bag) at the start of the trading session.

Moreover, during the session, the market saw an uptick in deliveries as harvest activity picks up after a quiet weekend. This subsequently led to a 12% increase in daily stocks to 636 226 pockets (10kg bag).

RSA Fruit:

The fruit market also ended the day mixed in yesterday’s trade session. The prices of apples and bananas were down by 11% and 6% from the previous day, closing at R6.74 per kilogramme and R5.99 per kilogramme, respectively. This was mainly on the back of large stocks in both apples and bananas markets.

Meanwhile, the price of oranges increased by 4% from the previous day, closing at R5.58 per kilogramme. These gains followed a 12% decline in daily stocks to 98 063 tonnes.

Click below to read more recent reports by Wandile Sihlobo.

Agbiz Morning Market Viewpoint on Agri-Commodities – 05 October 2017

The post Dryness across winter wheat growing areas could lead to downward revision of current national crop estimate appeared first on Agri Limpopo.

South African Agricultural Commodities Weekly Wrap

The South African Supply and Demand Estimates Committee’s latest data paints a mixed picture regarding the country’s grain and oilseed supplies for the 2017/18 season.

All summer crops are in good shape and the country will be a net exporter, whilst there are lingering concerns regarding winter crop growing conditions and supplies. More specifically, wheat imports could increase by 94% year-on-year to 1.8 million tonnes if the forecast production of 1.7 million materialises.

From a price perspective, this was a fairly quiet week. It appears that most of the bearish news regarding the large summer grain and oilseed supplies has largely been priced in.

Apart from this, the fruit and vegetable prices were volatile throughout the week with daily stock levels underpinning the market. The SAFEX beef carcass market remained flat throughout the week.

Click below to read more recent reports by Wandile Sihlobo.

South African Agricultural Commodities Weekly Wrap – 06 October 2017

The post South African Agricultural Commodities Weekly Wrap-Up appeared first on Agri Limpopo.

South Africa’s average dam Levels: week ended 02 October 2017 (last year’s figures in brackets – 02 October 2016)

Click below to read more recent reports by Wandile Sihlobo.

Agbiz Morning Market Viewpoint on Agri-Commodities 09 October 2017

The post Western Cape dam levels remain unchanged, averaging at 36% appeared first on Agri Limpopo.

Weather:

The most recent weather updates show that the eastern, central and northern parts of South Africa could receive rainfall of between 20 and 80 millimetres within the next eight days (figure 1). This could benefit the summer crop growing areas. Meanwhile, the Western Cape province could remain dry and cool over the observed period which is not conducive for winter crops. 

Maize:

The weather is increasingly becoming a primary focus as the new season planting commences in the eastern parts of South Africa. The forecasts paint a positive picture of widespread showers across the maize belt within the next two weeks.

Although the forecast rainfall could possibly slow planting activity in the short term, it will replenish soil moisture which is conducive for the new season crop. The long-term weather forecasts also paint a positive picture, following the South African Weather Service’s report which indicated a possibility of above normal rainfall across the maize-belt between November 2017 and February 2018.

Wheat:

The persistent dryness in the Western Cape province could potentially worsen the crop conditions, which are already not in good shape in large parts of the province.

The aforementioned developments support the South African Supply and Demand Estimate Committee’s view that the country could see an uptick in wheat imports in order to fulfil the domestic needs.

Using the CEC’s view of 1.7 million tonnes of wheat production this season, the South African Supply and Demand Estimate Committee forecasts a 94% year-on-year increase in imports in the 2017/18 season to 1.8 million tonnes.

Within the continent, recent reports from the International Grains Council indicate that the Ethiopian government is looking for 400 000 tonnes of milling wheat from the optimal origin. Not of importance but interesting to note is that Mauritius recently bought 52 825 tonnes of wheat flour from the world market.

Soybeans:

It is an off-season period with limited activity in the fields, therefore the market will remain relatively quiet in the near term. There are also no major data releases, which means the market performance will largely be guided by Chicago soybean price and domestic currency movements this week.

Farmers in the eastern parts of the country have already started preparing the soil for the 2017/18 summer grain and oilseed production season. For soybean, the planting window has already opened in Kwa-Zulu Natal province, but in most provinces, the planting window will only open in November and closes at the beginning of December.

Moreover, the weather prospects for the upcoming season remain positive with chances of above-normal rainfall in the eastern areas of the country, which should replenish soil moisture and benefit the crop.

RSA Potatoes:

The South African potatoes market started the week on a positive footing, with the price up by 4% from the previous day, closing at R51.73 per pocket (10kg). These gains were mainly on the back of relatively lower stocks of 722 238 pockets (10kg bag) at the start of the trading session.

During the session, the market saw a continued increase in commercial buying interest, coupled with a decline in deliveries on the back of slow harvest activity over the weekend. This subsequently led to a 38% drop in daily stocks to 449 556 pockets (10kg bag).

RSA Fruit:

The fruit market was again mixed in yesterday’s trade session. The prices of apples and bananas were down by 7.1% and 6.9% from the previous day, closing at R6.78 per and R5.69 per kilogram, respectively. These losses followed an increase in daily stocks of apples and bananas to 231 765 and 253 893 tonnes, respectively.

Meanwhile, the oranges market gained 0.8% from the previous day, with the price closing at R5.36 per kilogram due to the lower stock of 53 463 tonnes.

Click below to read more recent reports by Wandile Sihlobo.

Agbiz Morning Market Viewpoint on Agri-Commodities – 10 October 2017

The post Eastern cape farmers already starting to prepare the soil for the 2017/18 summer grain and oilseed production season. appeared first on Agri Limpopo.

Maize:

The eastern parts of the South African maize-belt could receive good showers within the next eight days. This will replenish soil moisture, which is conducive for the new season crop. As we set out in our note yesterday, the long-term weather forecasts show that there is a possibility of above normal rainfall across the maize-belt between November 2017 and February 2018. This will support the new season crop.

From a trade perspective – South Africa exported 61 983 tonnes of maize in the week ending 06 October 2017, which is double the volume exported the previous week. About 87% of these exports were yellow maize, with 13% being white maize.

The leading buyer was Japan with a share of 83%, all yellow maize. Trailing Japan was Botswana with a share of 8%, largely white maize. This placed South Africa’s 2017/18 total maize export volume at 1.4 million tonnes, which equates to 64% of the season’s export forecast of 2.2 million tonnes. About 66% of the exported 1.4 million tonnes is yellow maize, with 34% being white maize.

On the global front – The forecast rainfall across the north-eastern parts of the US Midwest could slow the harvest activity within the next eight days. At the beginning of this week, about 22% of the US maize crop had already been harvested, which is 11-points behind the corresponding period last year. The International Grains Council forecasts the US 2017/18 maize production at 358, down by 7% from the previous season.

Wheat:

The most recent weather updates show a possibility of light showers across the coastal areas of the Western Cape province, which implies that a large part of the crop could be strained for some time. More concerning is that this could lead to a downward revision of the current national crop estimate of 1.7 million tonnes. An update of the potential size of the crop will be released on 26 October 2017.

In terms of dam levels – the recent update for the week ending 09 October 2017 shows that dams averaged 36% in the Western Cape province, which is unchanged from the previous week, but 26-points lower than the corresponding period last year.

From a trade perspective – South Africa imported 37 337 tonnes of wheat in the week ending 06 October 2017, all from Ukraine. This was the first batch of imports in the 2017/18 marketing season. This season’s imports are currently estimated at 1.8 million tonnes, up by 94% year-on-year.

This is under the assumption that domestic production will reach 1.7 million tonnes. Therefore, in the event that production declines further, as we expect; the import estimate of 1.8 million tonnes could be revised up over the coming months.

Soybeans:

Although the planting window has already opened in Kwa-Zulu Natal province, the heavy rainfall could delay the process. In addition, the forecast for the next eight days shows that rainfall could continue across the eastern parts of the country.

However, this is not much of a concern, there is enough time for farmers to plant. The optimal planting window for Kwa-Zulu Natal province and other parts of the country only closes at the beginning of December.

In global markets – The forecast rainfall in the north-eastern parts of the US Midwest could slow the maturation and harvest process. At the beginning of this week, 36% of the US soybean had already been harvested, which is a 14-point increase from the previous week. With that said, this was 8-points behind the corresponding period last year. At the same time, 61% of the crop was rated good/excellent, which is 13-points lower than the same period last year.

Sunflower seed:

There are ideas in the market that sunflower seed price competitiveness and good weather could entice farmers to switch some acreage from maize to this particular crop.  With that said, clear indications will be revealed by end of the month when the National Crop Estimate Committee releases its “summer crop intentions to plant” data.

In terms of weather, the prospects are positive with possible widespread showers across the sunflower seed producing areas of South Africa within between November 2017 and February 2018.

Apart from this, this week’s calendar is light with no major data releases. Therefore, the market will again be driven by the domestic currency movements and traded volumes in the local market within the next few days.

RSA Potatoes:

The South African potatoes market received additional support in yesterday’s trade session with the price up by 8% from the previous day, closing at R55.79 per pocket (10kg). These gains were on the back of lower stocks of 449 556 pockets (10kg bag) at the start of the trading session.

However, during the session, the market saw an uptick in deliveries as harvest activity picks up after a quiet weekend. This subsequently led to a 17% increase in daily stocks to 524 473 pockets (10kg bag).

SAFEX beef carcass:

It is more of the same in the SAFEX beef carcass market. The prices remained flat in yesterday’s trade session, at R46.00 per kilogramme due to thinly traded volumes. This basically implies that the SAFEX beef carcass prices might differ from the physical market, which continues to show solid activity and higher traded volumes.

The South African cattle industry is normalising after the 2015-16 drought. The most recent data from the Red Meat Levy Admin shows that farmers slaughtered 228 632 head of cattle in August 2017, up by 12% from the previous month, but still down by 5% from the same period last year. That said, it is unclear whether this will be a temporary blip or full recovery. We will closely monitor the developments over the coming months.

Click below to read more recent reports by Wandile Sihlobo.

Agbiz Morning Market Viewpoint on Agri-Commodities – 11 October 2017

The post SA exported double the volume of maize in the week ending 06 October compared to previous week appeared first on Agri Limpopo.

Maize:

The weather forecast has cleared up across the South African maize-belt. This is an opportunity for farmers in the eastern regions of the country to continue with planting activity or soil preparation.

With that said, widespread rainfall could return in the week ending 27 October 2017. This might slow the planting activity, which will not be an issue as the optimal planting window in the eastern parts of the country is open until mid-November.

The key data to watch today is the USDA’s World Agricultural Supply and Demand Estimates report. This will entail the agency’s forecast for South Africa’s 2017/18 maize production. As early as last month, the USDA had already projected South Africa’s new season crop at 12.5 million tonnes. This is roughly in line with the long-term production trend (discounting the drought years, 2015-16).

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 32 228 tonnes in the week ending 06 October 2017, which is a 50% decline from the previous week’s deliveries. About 64% of this was white maize, with 36% being yellow maize.

Overall, South Africa’s 2017/18 total maize deliveries for “week 1 to 23” currently stand at 14.76 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.

Wheat:

There are no new major developments on the weather front for the Western Cape province. The most recent updates show a possibility of light showers across the coastal areas the province, which implies that a large part of the crop could be strained for some time.

As indicated in our previous note, the persistent dryness increases a chance of downward revision of the current national crop estimate of 1.7 million tonnes. On 26 October 2017, the National Crop Estimate Committee will release its official production estimates update. 

On the global front – This morning the Chicago wheat price was up by 0.46% from levels seen at midday yesterday due to bargain-buying after prices reached lower levels in the past few days.

Apart from that, the focus is on today’s USDA World Agricultural Supply and Demand Estimates report. In last month’s update, the agency estimated the US 2017/18 wheat production at 47 million tonnes, down by 24% from the previous season.

At the moment, the forecast rainfall in the north-eastern parts of the Midwest could improve soil moisture and benefit the winter wheat crops. At the beginning of this week, about 48% of the intended winter wheat acreage had already been planted, which is 9-points behind the corresponding period last year.  Moreover, about 25% of this crop had already emerged, which is 7-points behind the same period last year.

Soybeans:

The weather forecast has cleared up across the country, with the exception of the coastal areas. This will present some breathing space for farmers in the eastern areas of the country to continue with early planting activity .

In global markets – This morning the Chicago soybean price was up by 0.31% from levels seen at midday yesterday due to concerns that dryness in Brazil could reduce the 2017/18 soybean crop.

Conab revised up its estimate for Brazil’s 2017/18 soybean acreage by 555 000 hectares to 35 million hectares. This is partially on the back of an expected decline in maize plantings due to price competitiveness and weather challenges.

With that said, the unfavourable weather conditions could lead to relatively lower yields. As a result, Conab placed the country’s 2017/18 production is set to decline by 5% year-on-year to 108 million tonnes. This is in line with the International Grains Council view and slightly higher than the USDA’s view of 107 million tonnes.

Sunflower seed:

The South African sunflower seed market continued on its roller-coaster ride in yesterday’s trade session as the relatively stronger domestic currency and prospects of an increased acreage in the new season underpinned the market.

There are ideas in the market that sunflower seed price competitiveness and good weather could tempt farmers to switch some acreage from maize to this particular crop.  More information on this will be available on 26 October 2017 when the National Crop Estimate Committee releases its “summer crop intentions to plant” data.

In the global market – Favourably dry and warm weather conditions in the Black Sea have allowed for good progress in harvest activity. On 10 October 2017, Russia and Ukraine had harvested 40% and 85% of this season’s sunflower seed crop, respectively.

Elsewhere, the harvest process is also underway in the US. At the beginning of this week, 6% of the area had already been harvested. However, this is 5-points behind the corresponding period last year and 6-points behind a 5–year average progress.

RSA Potatoes:

After having a good run in the past few months, the South African potato market pulled back during yesterday’s trade session with the price down by 8% from the previous day, closing at R51.59 per pocket (10kg). These losses followed an uptick in stocks to 524 473 pockets (10kg bag) at the start of the trading session.

Moreover, during the session, the market saw an uptick in deliveries on the back of ongoing harvest process. This subsequently led to a 41% increase in daily stocks to 736 965 pockets (10kg bag).

Click below to read more recent reports by Wandile Sihlobo.

Agbiz Morning Market Viewpoint on Agri-Commodities – 12 October 2017

The post Eastern region farmers prepare for early planting activity as weather forecasts clear up across the country appeared first on Agri Limpopo.

This was a fairly quiet week in the South African agricultural commodities markets with no major data releases. The relatively weaker domestic currency, coupled with commercial buying interest were the key drivers of the market.

Thus, leading to marginal gains across the board with the exception of the sunflower seed market which declined by 1% compared to the previous week.

The calendar for the week ahead is light with only weekly grain trade and deliveries data due for release. With that said, the weather will be a primary focus as the planting season in the summer rainfall area progresses.

Apart from this, the fruit and vegetable prices were volatile throughout the week with daily stock levels underpinning the market. The SAFEX beef carcass market remained flat throughout the week.

Click below to read more recent reports by Wandile Sihlobo.

South African Agricultural Commodities Weekly Wrap – 13 October 2017

The post A weaker domestic currency and commercial buying interest key drivers of this week’s market appeared first on Agri Limpopo.

South Africa’s average dam Levels: week ended 09 October 2017 (last year’s figures in brackets – 09 October 2016) 

Source: Department of Water and Sanitation and Agbiz Research

Maize:

This week’s domestic maize calendar is fairly light with only weekly trade and deliveries data due for release. As a result, the weather will be a primary focus as the planting activity in the eastern regions progresses.

The weather prospects remain positive with a possibility of widespread rainfall of between 16 and 35 millimetres across the South African maize-belt within the next eight days. This might slow the planting activity, which will not be an issue as the optimal planting window in the eastern parts of the country is open until mid-November, and in the western areas until December.

In its World Agricultural Supply and Demand Estimates monthly report, the USDA estimated South Africa’s 2017/18 maize production at 12.5 million tonnes. This is roughly in line with the long-term production trend (discounting the drought years, 2015-16). Additionally, this is well above South Africa’s annual maize consumption of 10.5 million tonnes.

With that said, it is still too early to be certain about the size of the new season crop. The National Crop Estimate Committee will release the farmer’s ‘intentions-to-plant’ data on Thursday next week, 26 October 2017. This will give an indication of the potential size of the new season crop.

Wheat:

Although the winter wheat crop is in a fair condition in irrigation areas of the country, the dryland areas are not in good shape, especially the Swartland region of the Western Cape province. This is a result of continued dryness across the province.

The water levels in dams also resemble the current situation. The recent update for the week ending 09 October 2017 shows that dams averaged 36% in the Western Cape province, which is unchanged from the previous week, but 26-points lower than the corresponding period last year.

On the global front – This morning the Chicago wheat price was up by 1.86% from levels seen at midday Friday due to lingering concerns of dryness in Australia, as well as relatively lower production in the US.

The USDA forecasts the US 2017/18 wheat production at 47 million tonnes, which is 25% lower than the previous season’s harvest. In addition, this is almost in line with the International Grains Council estimate.

Overall, the 2017/18 global wheat production is estimated at 751 million tonnes, up by 1% from last month’s estimate, but 0.4% lower than the 2016/17 global wheat harvest.

Soybeans:

While the expected rainfall within the next two weeks could improve soil moisture, it will slow the planting activity. However, this is not much of a concern, there is enough time for farmers to plant. The optimal soybean planting window only closes at the beginning of December.

In global markets – The weather remains a primary focus in the US soybean market as it could influence the harvest processes. The forecast for the next eight days shows a possibility of light showers in the north-eastern parts of the Midwest which could potentially slow the maturation and harvest process.

At the beginning of last week, 36% of the US soybean had already been harvested, which is 8-points behind the corresponding period last year. At the same time, about 61% of the crop was rated good/excellent, which is 13-points lower than the same period last year. An update will be released this evening as part of the USDA’s weekly crop progress report.

Sunflower seed:

The forecast rainfall across the country within the next two weeks could improve soil moisture ahead of the planting period which commences at the beginning of November. As previously noted, there are ideas in the market that sunflower seed price competitiveness and good weather could tempt farmers to increase acreage in this upcoming season.

Apart from the aforementioned developments, it is still an off-season period in the domestic sunflower seed market and this week’s calendar is light with no major data releases. Therefore, the market will most likely be driven by the domestic currency movements and traded volumes in the local market.

RSA Potatoes:

The South African potato market lost ground in Friday’s trade session with the price down by 4% from the previous day, closing at R47.55 per pocket (10kg). These losses were on the back of large stocks of 920 650 pockets (10kg bag) at the start of the trading session.

Moreover, during the session, the market saw an uptick in deliveries due to ongoing harvest process. This led to a 7% increase in daily stocks to 986 753 pockets (10kg bag).

RSA Fruit:

The fruit market ended the day mixed during Friday’s trade session. The prices of apples and oranges were up by 2% and 57% from the previous day, closing at R7.54 per and R5.92 per kilogram, respectively. These gains were due to relatively lower stocks of 135 755 tonnes of apples and 64 694 tonnes of oranges.

Meanwhile, the bananas market lost 5% from the previous day, closing at R6.44 per kilogram due to the relatively large stock of 217 720 tonnes. Moreover, strong commercial selling also added pressure to the market.

Click below to read more recent reports by Wandile Sihlobo.

Agbiz Morning Market Viewpoint on Agri-Commodities – 16 October 2017

The post Most of SA’s dams remain unchanged: week ended 09 Oct 2017 appeared first on Agri Limpopo.

Weather:

The eastern, central and northern parts of South Africa could receive rainfall of between 16 and 50 millimetres within the next eight days (figure 1). This could benefit the summer crop growing areas. Meanwhile, a large part of the Western Cape province could remain dry and cool over the observed period which is not conducive for winter crops. 

Maize:

Apart from the weather, lower maize prices could present challenges for farmers, particularly the white maize producing regions. The large supplies from the 2016/17 production season could keep white maize prices under pressure for some time.

As a consequence, there are talks in the market that some farmers could reduce the area planted to white maize and switch to other crops such as oilseeds and yellow maize due to price competitiveness. More information on this will be available when the National Crop Estimate Committee releases its “intentions-to-plant” data next week, 26 October 2017.

On the global front – The expected rainfall across the north-eastern parts of the US Midwest could slow the harvest activity within the next eight days. At the beginning of this week, about 28% of the US maize crop had already been harvested, which is 16-points behind the corresponding period last year.

Overall, the USDA forecasts the country’s 2017/18 maize production at 363 million tonnes, down by 6% lower than the previous season’s harvest due to a decline in acreage and expected lower yields in some regions. 

Wheat:

The weather forecasts show a possibility of the dry and cool conditions across the central and northern parts of the Western Cape province within the next two weeks. This is with the exception of the coastal areas which could receive light showers. On balance, the persistent dryness could potentially worsen the crop conditions, which are already not in good shape in large parts of the province.

More emphasis is placed in the Western Cape because the province produces almost half of South Africa’s wheat crop.  This season’s national winter wheat crop is estimated at 1.7 million tonnes, down by 11% from the previous season. The National Crop Estimate Committee will release an updated estimate on 26 October 2017.

There are still no new developments on the wheat import tariff front. After triggering to R909.99 per tonne on 12 September 2017, the wheat import tariff again triggered to R716.33 per tonne on 10 October 2017. Both of these rates have not yet been published in the government gazette.

The wheat import tariff is still R752.40 per tonne. This means that the tariff will first increase to R909.99 per tonne, then be revised down to R716.33 per tonne. The timeframe for these adjustments is unclear at the moment.

Soybeans:

The weather models show a possibility of rainfall in the eastern parts of the country within the next two weeks, which should improve soil moisture and benefit the new season crop. With that said, this could delay plantings but that is not much of an issue as the optimal planting window only closes at the beginning of December.

As we set out in yesterday’s note, the calendar for this week is light with no major data releases, the market performance will largely be guided by the Chicago soybean price and domestic currency movements. 

In global markets – This morning the Chicago soybean prices lost ground with the price down by 0.60% from the previous day owing to expected large supplies.  

The USDA forecasts the US 2017/18 soybean production at 120 million tonnes, up by 3% from the previous season due to an increase in acreage, as well as higher yields. However, a large part of the crop is not in good shape. Only 61% of the crop is rated good/excellent, which is 13-points lower than the same period last year.

The forecast rainfall in the north-eastern part of the Midwest could slow the soybean harvest process. At the beginning of last week, 49% of the US soybean had already been harvested, which is 10-points behind the corresponding period last year.

RSA Potatoes:

The South African potato market started the week on a negative footing due to large stocks of 986 753 pockets (10kg bag). The price was down by 5% from the previous trading session, closing at R45.22 per pocket (10kg).

However, during the session, the market saw a continued increase in commercial buying interest, coupled with a decline in deliveries on the back of slow harvest activity over the weekend. This subsequently led to a 27% drop in daily stocks to 718 115 pockets (10kg bag).

RSA Fruit:

The fruit market saw widespread losses in yesterday’s trade session due to large stocks and increase commercial selling. The prices of apples and bananas were down by 9% and 4% from the previous day, closing at R6.83 and R6.19 per kilogram, respectively. These losses followed a 94% and 3% increase in stocks of apples and bananas to 263 592 tonnes and 223 956 tonnes, respectively.

The oranges market lost 27% from the previous day, closing at R4.33 per kilogram due to strong commercial selling. However, this could soon be reversed due to lower stocks of 40 704 tonnes.

Click below to read more recent reports by Wandile Sihlobo.

Agbiz Morning Market Viewpoint on Agri-Commodities – 17 October 2017

The post Emphasis placed on Western Cape’s winter wheat as bad weather continues appeared first on Agri Limpopo.