The annual food producer price inflation decelerated to 4.7% y/y in June 2017, from 5.7% y/y in May 2017. This shows the benefits of the higher agricultural output this year following good summer rainfall across the country. The deceleration was largely in grain, sugar, dairy, starches, and vegetable and fruit products. Meanwhile, meat and meat products accelerated due to on-going cattle herds restocking process resulting from the 2015-16 drought, as well as low base factors.

The general deceleration in food producer inflation is due to the recovery in agricultural production. The total production of summer grains and oilseeds is estimated at 18.44 million tonnes, which is a 96% annual increase. This has led to a widespread decline in agricultural commodity prices. White maize spot price currently trades at levels around R1 768 tonnes, which is 59% lower than the same period last year. Yellow maize spot price is trading at levels around R1 889 per tonne, which is 42% lower than the same period last year. Soybean spot price is at a level around R4 711 per tonne, which is a 31% annual decline. The decline in yellow maize and soybean prices will also benefit other sectors, such as the livestock and poultry.

While meat price inflation increased at the fastest pace of 17% y/y, there seems to be some level of improvement in slaughtering which could lift meat supply. The most recent data from the Red Meat Levy shows that farmers slaughtered 202 886 head of cattle in May 2017, up by 5% from the previous month.

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Looking ahead – the large agricultural output will keep agricultural commodity prices under pressure over the short-to-medium term. This essentially means that food inflation also could remain at relatively lower levels. With that said, the recent outbreak of avian influenza in the poultry sector remains a risk. The virus has been reported in isolated farms in Mpumalanga, Free State and Gauteng. We will closely monitor the developments within the poultry industry in order to ascertain the impact on food inflation in the coming months.

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The recent update for the week ending 04 September 2017 shows that dams averaged 34% in the Western Cape province, which is a 1% improvement from last week, but 28% lower than the corresponding period last year.

Highlights in today’s morning note

Wheat:

The winter wheat crop is in fair conditions in some parts of the Western Cape province following the past few week’s showers, albeit being insufficient to replenish soil moisture. Meanwhile, in the Free State province, the crop is in fair to poor condition due to persistent dryness.  

Maize:

There are positive prospects regarding the new season maize crop which should commence in October. A recent report from the South African Weather Service shows that the north-eastern parts of the country could receive above normal rainfall between October and December 2017. This coincides with the planting period and could aid seed germination. 

Click here to read more.

Soybeans:

The data calendar for the rest of the week is fairly light, and it is an off season period with not much activity in the fields. Therefore, market performance will, again, largely be guided by the Chicago soybean price and domestic currency movements within the next few days.  

Sunflower seed:

It is an off season period for South Africa’s sunflower seed 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 potatoes market lost ground during Friday’s trade session with the price down by 3% from the previous day, closing at R39.43 per pocket (10kg). These losses were partly on the back of relatively large stocks of 849 679 pockets (10kg bag) at the start of the session.

RSA Fruit:

The fruit market ended the day mixed on Friday’s trade session. The price of oranges was up by 1% from the previous day, closing at R2.81 per kilogramme due to strong buying interest. Meanwhile, the prices of apples and bananas were down by 6% and 2% from the previous day, closing at R7.50 per kilogramme and R5.81 per kilogramme, respectively. 

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The notable gains were on sunflower seed with the spot price up by 2% compared to the previous week. The maize and soybean spot prices were each up by 1% from the previous week, whilst wheat was up, marginally, by 0.41%.  

The week ahead is data packed, with the National Crop Estimate Committee’s production estimates and SAGIS weekly data due for release. Any major changes in these particular data points could lead to notable movements in the grain and oilseed markets.

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 ended the week on a quiet note with prices unchanged from the previous week due to thinly traded volumes.

Click here for the South African Agricultural Commodities Weekly Wrap.

The post Notable gains in grain markets. appeared first on Agri Limpopo.

To everyone who takes a bit of time to read what we write, thank you. Best wishes for 2018.

Highlights in today’s morning note

South Africa’s average dam levels: week ended 01 January 2018 (last year’s figures in brackets – 01 January 2017)

Source: Department of Water and Sanitation and Agbiz Research

Weather:

 While temperatures could rise to levels above 26 degrees Celsius at the start of this week, there is a possibility of light rainfall in most parts of the country within the next eight days (see figure 1 – attached report). However, this will not be sufficient to significantly improve soil moisture in summer crop producing areas. Meanwhile, the Northern Cape and Western Cape provinces might remain dry and warm over the observed period.

Maize:

 The expectations of rainfall in the latter part of 2017 did not materialise in most areas, particularly the western regions. As result, the maize planting process has not yet been completed in some areas. Moreover, the areas that managed to plant on time are currently experiencing heat stress, but no major damage reported thus far.

Farmers planned to plant 2.47 million hectares of maize this season, which is 6% lower than the 2016/17 production season. About 56% of the area is set to be for white maize, with 44% for yellow maize. However, this might change due to the aforementioned delays in planting in the western regions of the country. Overall, there will be more clarity when the National Crop Estimate Committee releases its estimates on 30 January 2018.

South Africa’s maize supplies are still solid. SAGIS recently reported that the country’s maize stocks were at 8.2 million tonnes in November 2017, which is twice the volume seen in the same period in 2016. This notable uptick is mainly due to a record commercial maize production of 16.74 million tonnes in the 2016/17 season.

From a trade perspective, South Africa exported 64 206 tonnes of maize in the weeks of 09 to 29 December 2017. The leading buyer was Japan with a share of 56%, all yellow maize. This placed South Africa’s 2017/18 total maize export volume at 1.7 million tonnes, which equates to 77% of the season’s export forecast of 2.2 million tonnes.

Wheat:

In December 2017, the National Crop Estimate Committee revised its 2017 wheat production estimates down by 7% from the previous month to 1.48 million tonnes. This is 23% lower than the previous season’s crop. The downward revision was mainly due to disappointing yields in the Western Cape and Free State provinces, on the back of unfavourable weather conditions. The sixth production estimates for 2017 wheat will be released on 30 January 2018.

Overall, this implies that South Africa will have to import at least 1.80 million tonnes of wheat in the 2017/18 marketing year in order to fulfil the domestic needs. This is almost double the previous marketing year’s imports of 934 765 tonnes.

South Africa imported 48 432 tonnes of wheat in the weeks of 09 to 29 December 2017. About 66% came from Russia and 34% from Argentina. This placed 2017/18 marketing year’s wheat imports at 625 073 tonnes, which equates to 35% of the seasonal import forecast of 1.80 million tonnes (This is under the assumption that domestic production will reach 1.48 million tonnes).  

Sunflower seed:

The expectations of heavy rainfall in the summer crop growing areas of South Africa did not materialise in most areas during the festive season, particularly the western parts of the country. As a result, the sunflower seed planting process has somewhat been delayed, and the areas that have planted continue to experienced heat stress which could possibly damage the crops.

The South African farmers intended to plant 665 500 hectares of sunflower seed in the 2017/18 production season, up by 5% from the previous season. Given the aforementioned realities, this target is unlikely to be achieved. The National Crop Estimate Committee will release the preliminary area planted estimates on the 30th of January 2018.

Aside from this, the country still has large supplies from the 2016/17 production season. South Africa’s sunflower seed ending stocks were recorded at 374 117 tonnes in November 2017, down by 20% from the previous month, but up by 32% from the corresponding period last year.

In terms of trade, South Africa exported 42 tonnes of sunflower seed to Namibia in November 2017, which is well above the previous month’s exports of a mere one tonne. This brought the country’s 2017/18 sunflower seed exports to 168 tonnes – all went to regional markets, namely; Botswana, Namibia and Swaziland.

Also worth noting is that sunflower seed consumption (crushed oil and cake) declined by 3% month-on-month to 92 650 tonnes in November 2017. However, this is 59% higher than the volume utilised in November 2016.

Soybeans:

Unlike other crops, such as maize and sunflower seed, most soybean growing areas of the country managed to plant on time, with the exception of few areas in the western parts of the country which experienced delays due to dryness. The expected rainfall at the end of 2017 did not materialise in some regions, particularly the western areas, where soil moisture is still low.

The South African farmers planned to plant an area of 720 000 hectares in the 2017/18 production season. However, the current warm weather conditions could hamper this target. That said, there will be more clarity when the National Crop Estimate Committee releases its preliminary area planted data at the end of this month.

Apart from that, South Africa’s soybean consumption (crushed oil and cake) was reported at 95 433 tonnes in November 2017, up by 51% from the previous month, and 57% from November 2016.  Also worth noting is that the soybean ending stocks were at 589 106 tonnes in November 2017, down by 15% from the previous month, but double the volume seen in November 2016 due to a large harvest in 2016/17 production season.

From a trade perspective, the large soybean harvest of 1.32 million tonnes received in 2016/17 production season implies that South Africa could receive minimal imports in the 2017/18 marketing year. This is a remarkable improvement following imports of 271 098 tonnes in the previous marketing year.

The country imported 1 324 tonnes of soybean in November 2017. About 78% of this came from Zambia and the balance from Malawi. This placed South Africa’s 2017/18 soybean imports to 26 392 tonnes, which equals to 94% of the seasonal import forecast of 28 000 tonnes.

RSA Potatoes:

After a positive start this year, the South African potatoes price came under pressure in Friday’s trade session, down by 2% from the previous day, closing at R42.65 per pocket (10kg). These losses were mainly underpinned by large stocks of 776 791 pockets (10kg bag) at the beginning of the trading session.

In addition, during the session, the market saw an uptick in deliveries as harvest activity picks up after a quiet period during the Christmas holidays. This led to a 6% increase in daily stocks to 824 387 pockets (10kg bag).

RSA Fruit:

After a wobbly performance in the latter part of 2017, the fruit market started the year again on a mixed footing driven by relatively lower stocks. The prices of bananas and oranges were up by 9% and 13% from the previous day, closing at R6.78 per kilogram and R7.04 per kilogram, respectively. This was partially due to lower stocks of 289 320 tonnes of bananas and 21 088 tonnes of oranges.

Meanwhile, the price of apples was down by 2% from the previous day, closing at R8.68 per kilogram. This followed an uptick in daily stocks to 135 710 tonnes.

SAFEX beef carcass:

The SAFEX beef carcass market started the year on a quiet footing with the price flat at R44.00 per kilogram.  However, this could differ from the physical market which continues to show solid activity and volumes.

In October 2017, South African farmers slaughtered 219 393 head of cattle, up by 3% from the previous month, but 7% lower compared to October 2016. The Red Meat Levy Admin will release an update of the cattle slaughtering data later this month, and that will probably show an uptick due to strong festive season demand.

Click below to read more reports by Wandile Sihlobo

Agbiz Morning Market Viewpoint on Agri-Commodities 08 January 2018

The post Agbiz Morning Market Viewpoint on Agri-Commodities: 08 January 2018 appeared first on Agri Limpopo.

Dr Marinda Visser, manager of Grain SA’s Research and Policy Centre, said reports had been received of the pest on sunflower but these had not yet been confirmed in a laboratory.

She said that Grain SA had appointed the company Crop Watch to conduct detection and surveillance of FAW.

“It’s better to receive the information earlier rather than later,” she said, adding that the pest was under control in South Africa and the country was “not in crisis mode”.

Manager of early warning systems at the Department of Agriculture, Forestry and Fisheries, Jan-Hendrik Venter, confirmed that the department had received information from a reputable organisation of a possible detection of FAW on sunflower.

“But we haven’t received an official report yet,” he said.

He said the FAW steering committee met monthly and had not felt the need to meet more frequently.

“There are really very few cases this year. We know that it’s all over in Limpopo but this was something we predicted because it doesn’t get cold enough to kill it off.”

He said that the committee expected that from now on, FAW would always be present in areas such as Limpopo, KwaZulu-Natal and Mpumalanga.

“So we mustn’t get a fright every time we hear that FAW has been found in Limpopo,” he said.

Venter said there had been very few sightings in the Free State and North West to date, but the pest had been seen in Gauteng and the Eastern Cape.

He said there could be a number of reasons for the lower number of cases in these two provinces. These could include the longer-lasting drought, a smaller maize crop, the fact that chemicals had been registered, and proactive management by farmers.

“They know about the worm. They scout and spray earlier,” he said.

Venter said that permits were now available for the use of pheromone traps for early detection at farm level.

He added that in South Africa, the pest seemed to prefer to lay its eggs on maize or sorghum and not sunflower.

He urged farmers continue scouting, and report any suspected sightings to him on 012 319 6384 or by e-mail at JanHendrikV@daff.gov.za.

Source: Farmer’s Weekly

The post FAW on sunflowers: Farmers should stay vigilant, but not panic appeared first on Agri Limpopo.

South Africa’s sub-soil moisture – 02 March 2018

Source: World Weather Inc.

Maize:

Last week’s showers were mainly concentrated in areas around the eastern sections of Limpopo and Mpumalanga provinces, whereas other regions remained cool and dry. With that said, the most recent report from World Weather Inc. shows that soil moisture has improved significantly across the maize belt from dryness experienced at the beginning of the year, particularly the western sections.

As a result, the maize crop is generally in good condition in most sections of the maize belt. Moreover, The expected rainfall within the next two weeks should further improve soil moisture and crop conditions.

It is worth highlighting again that the South African Weather Service forecasts a weak La Niña phase through to early autumn. This means that the maize growing regions of the country could receive good rainfall within the next two month. Overall, this reinforces the National Crop Estimates Committee’s view of a fairly good crop of 12.2 million tonnes in the 2017/18 production season.

In the region, the most recent data from Botswana’s Ministry of Agriculture shows that 2017/18 grain area plantings were at 42 800 hectares by end of February 2018, well below the area 167 562 hectares planted at the corresponding period last year.

Wheat:

Yesterday there was no new news in the domestic wheat market. The main focus today will be SAGIS weekly trade data which should give an indication of the wheat import activity.

To reiterate a point made in yesterday’s note, the upward revision of domestic wheat production to 1.5 million tonnes led a 3% downward revision of 2017/18 wheat import estimate from last month to 1.85 million tonnes. This is however still the second largest import volume on record in a dataset starting from 1936.

On the global front – The International Grains Council forecasts 2017/18 global wheat imports at 180 million tonnes, up by 1% from the previous season. The key importing regions are North Africa and Southeast Asia, with imports estimated at 29 million and 27 million tonnes, respectively. In North Africa region, the key buyers are Egypt, Algeria, Morocco and Tunisia.

Sub-Saharan Africa is also amongst the key wheat importing regions with 2017/18 wheat imports estimated at 23 million tonnes, up by 7% from the previous season. The leading buyers within this region are Nigeria, Sudan, South Africa and Kenya.

Soybeans:

South Africa’s 2017/18 soybean production season started in a better position than other crops due to rainfall in the eastern sections of the country. The crop is currently in good conditions, despite the dry and cool conditions experienced in the past few days.

Looking ahead, the weather forecasts promise higher rainfall within the next two weeks, which should further improve soil moisture and benefit the crop. This actually reinforces the National Crop Estimates Committee’s view of a possible record harvest of 1.4 million tonnes in 2017/18 production, up by 5% y/y.

While this is a welcome development, hail is always a key concern for the eastern sections of South Africa, especially when there are expectations of heavy rainfall. In the past few weeks, hail affected some areas in KwaZulu Natal and Mpumalanga provinces, but the impact on crops was minimal.

From a global demand perspective, China recently bought 198 000 tonnes of soybeans from the US. In fact, the Chinese soybean demand will remain solid throughout the season. The USDA forecasts China’s 2017/18 soybean imports at 97 million tonnes, up by 4% from the previous season. Moreover, this constitutes 65% of 2017/18 global soybean imports.

From a supply point of view, Informa Economics revised its estimate for Brazil’s 2017/18 soybean production up by 2 million tonnes from the previous month to 114 million tonnes. This is almost in line with the previous season’s harvest. Meanwhile, Argentina’s 2017/18 soybean production estimate was revision down by 7 million tonnes from last month to 44 million tonnes, owing to persistent dryness. This is roughly 20% lower than the previous season.

RSA Potatoes:

After recording losses on Friday’s trade session, the South African potatoes market was fairly quiet in yesterday’s trade session despite the large stock of 1.1 million pockets (10kg bag) at the start of the session.

However, towards the end of the session the market experienced commercial buying interest, coupled with relatively lower deliveries on the back of slow harvest activity during the weekend. This subsequently led to a 38% decline in daily stocks to 666 195 pockets (10kg bag).

RSA Fruit:

The fruit market started the week on a negative footing owing to large stocks. The prices of apples and bananas were down by 2% and 8% from the previous day, closing at R7.23 and R6.47 per kilogram, respectively. This was on the back of large stock of 216 00 tonnes of apples and 346 000 tonnes of bananas.

Moreover, the price of oranges declined by 30% from the previous day, closing at R8.31 per kilogram due to commercial selling. Looking ahead, the oranges market should soon gain ground as stocks are at lower levels of 4 000 tonnes, compared to levels of over 50 000 tonnes in December 2017.

Full report available below.

Agbiz Morning Market Viewpoint on Agri-Commodities 06 March 2018

The post Soil moisture has improved significantly across the maize belt appeared first on Agri Limpopo.

The notable gains were on soybeans and white maize with spot prices each up by 3%, respectively, compared to last week. Sunflower seed and yellow maize also had a good run this week with spot prices each respectively up by 2% from last week.

On the weather front, conditions remain favourable for the new season crop, following the South African Weather Service’s monthly update which noted a possibility of above-normal rainfall in summer crop areas between this month and May 2018.

The week ahead could present more of the same as the data calendar is quite light with only weekly grain trade and deliveries data due for release

Apart from grains and oilseeds, the fruit and vegetable prices were volatile this week with large daily stock levels underpinning the market. The SAFEX beef carcass market experienced another quiet week with prices unchanged from levels seen last week.

Click below for the full report by Wandile Sihlobo

South African Agricultural Commodities Weekly Wrap 09 March 2018

The post South African Agricultural Commodities Weekly Wrap: 09 March 2018 appeared first on Agri Limpopo.

The weather remains a key focus in the domestic maize market as the crop is still at its growing stages. The soil moisture has generally improved across the maize belt following rainfall in the past few weeks. But, follow up rainfall is needed given that the crop has been moisture-stressed in the western parts of the country following dryness in the past few days.

Fortunately, the near term weather forecasts show signs of good rainfall across the maize belt within the next two weeks. If this materialises, the maize crop will remain in good shape, which increases a chance of good yields this season .

While the focus is on the new production season, some farmers continue to deliver old season maize to commercial silos. The total maize deliveries were reported at 13 287 tonnes in the week ending 09 March 2018, well above the previous week’s deliveries of 13 287 tonnes. About 60 percent of this was yellow maize, with 40 percent being white maize. Overall, South Africa’s 2017/18 marketing year’s total maize deliveries for “week 1 to 45” currently stand at 15.39 million tonnes. Of this total, 59 percent is white maize with 41 percent being yellow maize.

Wheat:

Although the winter wheat growing season will only start in the next two months or so, the recent developments on the Western Cape weather front are worth highlighting. The weather charts currently show a possibility of light rainfall within the next two weeks across the coastal areas of the province.

This is a welcome development following weeks of dryness, but will not make a meaningful improvement on dam levels which are critically low, estimated at 20 percent in the week of 12 March 2018, unchanged from the previous week, but down by 9 percentage points from the corresponding period last year.

The volumes of wheat recently delivered to commercial silos declined significantly from levels seen the previous weeks. This mirrors the reduction in activity in the farms after the completion of the harvest process .

About 3 519 tonnes of wheat were delivered to commercial silos in the week ending 09 March 2018. This is up by 24 percent from the volume delivered the previous week, but well below the volumes delivered in the previous months when the harvest process was at its peak. Overall, this placed South Africa’s winter wheat producer deliveries for “week 1 to 23” of the 2017/18 marketing year at 1.46 million tonnes.

Soybeans:

This week the soybean growing areas were dry and cool so far, with light showers on Tuesday night only which were concentrated in areas around Lydenburg, Middelburg, Morgenzon, Witbank and Wonderfontein. With that said, this is not a greater concern as there is still a fair amount of soil moisture.

Moreover, the next two weeks promise the possibility of good rainfall which should further improve soil moisture. As noted in yesterday’s note, these weather developments support the Crop Estimates Committee’s view of a new record level of 1.4 million tonnes this season, up by 5 percent from the 2016/17 production season.

In global markets – There is speculation in the market that China’s soybean demand could partially shift from the US to South America owing to the recent political developments regarding US trade policy. China is the world’s leading importer of soybeans with a share of 64% in 2017/18 global soybean imports of 151 million tonnes.

In the past five years, the US has been one of the key suppliers of soybeans to China accounting for nearly 40% share of that market, according to data from Trade Map. Brazil and Argentina were amongst the key suppliers, hence the talks in the market point to a possible increase in South America’s share at the expense of the US in the Chinese soybean market over the coming years.

Sunflower seed:

The expected rainfall has not yet materialised in most areas of the country. Although not an immediate concern, it is worth noting that some crops in the western parts of the North West and Free State provinces are slightly moisture-stressed and urgently need rainfall.

There is hope however that the expected rainfall within the next eight days could offer a bit of relief. Fortunately, the medium-term forecasts promise a possibility of above normal rainfall in summer crop growing areas of South Africa between this month and May 2018 which should provide sufficient moisture for crop development throughout the season .

In the global market – The warm weather conditions in Argentina which have been disrupting the soybean crops have had a slightly positive impact on sunflowers, not by increasing yields but boosting the harvest process. Data from SUNSEEDMAN shows that on 14 March 2018, about 50% of this season’s Argentinian sunflower seed crop had already been harvested. The USDA forecasts the country’s 2017/18 sunflower seed crop at 3.6 million tonnes, up by 6 percent year-on-year.

RSA Potatoes:

After experiencing a good run at the start of the week, the potatoes market pulled back in yesterday’s trade session and settled in negative territory due to a large stock of 780 197 pockets (10kg bag) at the start of the session. The price was up by 9 percent from the previous day, closing at R32.40 per pocket (10kg).

In yesterday’s trading session, the market saw an uptick in deliveries on the back of ongoing harvest activity. This led to a 24 percent increase in daily stocks to 970 516 pockets (10kg bag).

RSA fruit:

The fruit market has been quite wobbly this week. The gains that were seen at the start of the week were again shaved off in yesterday’s session due to an uptick in daily stock levels. The prices of apples and bananas were down by down by 15 percent and 6 percent from the previous day, closing at R6.91 and R7.58 per kilogram, respectively.

Surprisingly, the price of oranges experienced extended losses of 17 percent from the previous day and settled at R4.54 per kilogram. We maintain that this will be short-lived because of fairly lower stock of 64 000 tonnes, compared to levels of over 70 000 tonnes in the past few days.

Full report by Wandile Sihlobo available below.

Agbiz Morning Market Viewpoint on Agri-Commodities 15 March 2018

The post Signs of good rainfall across maize belt within next two weeks appeared first on Agri Limpopo.

This season, weather conditions are once again playing a bigger role with the drought in the Western Cape and the delayed onset of rainfall in Free State and North-West provinces which affected production negatively.

Meanwhile, the weak US dollar – which translates into rand strength – offset the impacts of farm input costs (most of which are imported, such as fuel, fertilizers and chemicals) on the one hand, while making the commodity exports less competitive on the international markets, on the other.

In net terms, unfavourable weather implies a decline in yields (and in turn, production) while exchange volatility points to shifts in profitability. Considering the collective impact of these variables, we make a succinct reflection on weather, local market conditions and trade in the agricultural sector for the current planting season.

Full report by Wandile Sihlobo available in the attachment below.

SA agriculture_ immediate short to medium-term view 26 March 2018.

The post SA’s Agriculture: Immediate, short, to medium-term view – 26 March 2018 appeared first on Agri Limpopo.

Maize:

The recent rainfall caused some level of optimism in the maize growing regions of South Africa. Soil moisture has generally improved across the maize-belt, which should support the crop in the coming months, particularly the late planted areas in the western sections of the Free State and North West provinces as maize is at stages of development that require high moisture.

This week promises dry and cool weather conditions over most parts of the maize-belt, which should offer a breather as light rainfall is expected to return in the week of 11 April 2018. In addition, the next two months are expected to bring above normal rainfall, which bodes well for late planted areas.

Some global players are also fairly optimistic about South Africa’s 2017/18 maize production. Most notably, the International Grains Council recently revised South Africa’s 2017/18 maize production upwards by 900 000 tonnes from last month to 12.7 million tonnes.

While 28 percent lower than the 2016/17 production season’s harvest, this is well above South Africa’s annual consumption of 10.5 million tonnes. Overall, this expected harvest coupled with expected large carryover stock underpin the view that South Africa could remain a next exporter of maize in the 2018/19 marketing year which starts on 01 May 2018, with exports estimated at 2.2 million tonnes.

Wheat:

The International Grains Council recently revised its 2017/18 global wheat production up by a million tonnes to 758 million tonnes, which is essentially a percentage point increase from the previous season. This is almost in line with the United States Department of Agriculture’s production estimate for the same season.

This uptick is mainly underpinned by large production in the European Union, Russia, Argentina, Ukraine, China and India. The increase in production in these countries compensated for the decline in production in the US, Canada, Australia and Kazakhstan.

Moreover, the 2017/18 global wheat ending stock is estimated at 256 million tonnes, up by 7 percent from the previous season. Overall, this implies that the global wheat prices could trade sideways in the short to medium term as the market remains well supplied.

As highlighted in our note on 19 March 2018, an uptick in global wheat production is a positive development for net importing countries such as South Africa, particularly from a wheat user or processor’s perspective. South Africa’s 2017/18 wheat imports are estimated at 1.85 million tonnes. About two-thirds of this has already been imported. The leading supplies thus far are Russia, Lithuania, Argentina, Germany and Ukraine.

Soybeans:

At the beginning of last week, there were fears in the market that heavy rainfall could potentially cause damage in some soybean growing areas. Fortunately, the initial assessments mainly suggest improvements in soil moisture, with no crop damages. We will, however, engage more farmers during the course of the week in order to get a full picture, particularly in Mpumalanga province.

Encouragingly, the weather could provide some breathing room this week, with forecasts for major soybean growing provinces, Mpumalanga and eastern Free State, showing a possibility of drier and cool weather condition. There will potentially be light showers in the far eastern parts of both provinces.

Overall, these developments support the National Crop Estimates Committee’s view of a new record harvest of 1.4 million tonnes. An update of this estimate will be released tomorrow. We don’t foresee major changes in this estimate as weather conditions have been fairly favourable since the last assessment.

The expected improvement in production could also lead to a decline in South Africa’s soybean oilcake imports. We estimate that 2018 soybean oilcake imports could decline by 17 percent from last year to 458 992 tonnes. This is a notable improvement from imports of close to a million tonnes in 2010, thanks to a continuous increase in domestic production.

Sunflower seed:

In the fields, there is renewed optimism following last weeks’ rainfall over the sunflower seed growing areas. The late planted areas in the western section of the Free State and North West provinces stand to benefit most as the crop is at an early stage of development that requires moisture.

This week, however, could offer a breather, as weather forecasts show a possibility of dry and cool weather conditions across sunflower seed growing areas. The rainfall could return in the week of 11 April 2018. The weeks thereafter could also experience wet conditions as the South African Weather Service forecasts above normal rainfall between this month and May 218 in summer rainfall areas. These weather developments bode well for 2017/18 sunflower seed production.

From a data front, SAGIS will release its monthly data for February 2018. Last month’s data showed that South Africa’s sunflower seed consumption (crushed oil and cake) was at 79 218 tonnes in January 2018, up by 28 percent from the corresponding period last year.

RSA Potatoes:

The potatoes market lost ground in yesterday’s trade session owing to a fairly large stock of 830 365 pockets (10kg bag) at the start of the session. The price was down by 6 percent from the previous day, closing at R37.15 per pocket (10kg).

Towards the end of the session, the market experienced strong commercial buying interest, coupled with relatively lower deliveries on the back of slow harvest activity after the weekend. This subsequently led to a 29 percent decline in daily stocks to 587 136 pockets (10kg bag). This will potentially support the market today.

RSA fruit:

Yesterday the fruit market settled on a mixed footing. The prices of apples and bananas were up by 2 percent and 11 percentage point from the previous day, closing at R7.79 and R7.47 per kilogram, respectively. These gains were mainly underpinned by lower stocks of 154 000 tonnes of apples and 173 000 tonnes of bananas.

Meanwhile, the price of oranges was down by 4 percent from the previous day, settled at R4.75 per kilogram. This was due to a slight uptick in stocks to 73 000 tonnes, well above the levels of about 50 000 tonnes seen in the past few days.

Full report by Wandile Sihlobo available below.

Agbiz Morning Market Viewpoint on Agri-Commodities 27 March 2018

The post Possibility of cool and drier weather conditions for soybean crops appeared first on Agri Limpopo.