The second quarter agricultural GDP figures confirm that the sector is eventually out of the woods.

Data released showed that the sector grew by 33.6% q/q in the second quarter of 2017, which is significantly higher than the 22.2% q/q recorded in the first quarter of this year. This in line with the sentiment shared in the previous quarter that this positive growth path will continue throughout the year – sustained by robust agricultural output in the summer crops producing areas. Overall, we expect this positive growth path to be sustained throughout the year, but at a relatively lesser degree than what we observed in the first two-quarters of the year. 

These results mirror the increased activity in the overall agricultural sector, particularly summer grains, oilseeds, vegetables, as well as a slight recovery in the livestock industry. The 2017 total summer grains production are estimated at 18.91 million tonnes, which is double the previous season’s volume.

Click here to read more.

While the data paints an encouraging picture of the sector’s recovery, the persistent dryness is the Western Cape province remains a key concern.  This could affect the performance of the summer horticultural products, as well as winter grains and oilseeds which enable the province to contribute a lion share of 22% to the country’s agricultural economy.

Over and above, we expect this positive growth rate to continue in the coming quarters, but at a relatively lower pace. This sentiment is also echoed in the recently released Agbiz/IDC Agribusiness Confidence Index, which typically signals how South Africa’s agricultural GDP could perform in the succeeding quarters. The index registered 54 points in the third quarter, which is an expansionary territory – above 50-index points.

The post SA agricultural economy showing robust growth. appeared first on Agri Limpopo.

The marginal uptick in grains and oilseeds prices was largely supported by the relatively weaker domestic currency and commercial buying.

Click here to read more.

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.

For fruits and vegetables, the week has again been volatile 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 Agbiz Morning Market Viewpoint on Agri-Commodities – 14 September 2017.

The post South African Agricultural Commodities Weekly Wrap. 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.

Maize:

The weather conditions could remain favourable throughout the production season. The medium-term forecasts promise above average rainfall within the next two months across the maize belt, which should further improve soil moisture and benefit the crop.

From the data front, today the United States Department of Agriculture (USDA) will release its monthly update of the World Agricultural Supply and Demand Estimates report. Last month, the agency placed South Africa’s 2017/18 maize production estimate at 12.5 million tonnes (commercial and non-commercial maize production.), down from last season’s record harvest of 17.5 million tonnes.

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 4 241 tonnes in the week ending 02 March 2018, well below the previous week’s deliveries of 24 593 tonnes. About 61% of this was white maize, with 39% being yellow maize. Overall, South Africa’s 2017/18 marketing year’s total maize deliveries for “week 1 to 44” currently stand at 15.3 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.

Wheat:

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 2 848 tonnes of wheat were delivered to commercial silos in the week ending 02 March 2018. This is four-fold lower than the volume delivered the previous week, and 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 22” of the 2017/18 marketing year at 1.44 million tonnes.

On the global front – Making headlines yesterday was the intergovernmental contract between Iran and Russia, which could potentially lead to about 1.5 million tonnes of wheat exports to Iran in the coming years. This will be an important market for Russia as the country continues to see a solid increase in domestic wheat production.

In its February report, the USDA placed Russia’s 2017/18 wheat production at 85 million tonnes, up by 17% from the previous season owing to an increase in area planted, as well as expected higher yields. This is a notable contribution to global supplies, making up a share of 11%.

Soybeans:

The expected rainfall has not yet materialised in most soybean growing areas of the country. The only areas that received light showers on Tuesday evening were Bethlehem, Fouriesburg, Heilbron, Harrismith, Lindley, Ventersburg, Senekal, Morgenzon and Vereeniging.

Nevertheless, this is not much of a concern as soybean growing areas of South Africa still have a fair amount of soil moisture from rainfall received in the past few weeks. Moreover, the forecast rainfall within the next two weeks is in line with the South African Weather Service’s expectations of above normal rainfall within the next two months across the summer crop growing areas of the country.

In global markets – The global soybean demand remains solid, underpinned by strong demand from China. The USDA recently reported a sale of 120 000 tonnes of US soybean to China. As highlighted in our previous note, China National Grain and Oils Information Centre forecasts the country 2017/18 soybean imports at 96 million tonnes, slightly below the USDA’s estimate of 97 million tonnes.

RSA Potatoes:

The potatoes market lost ground in yesterday’s trade session owing to a large stock of 739 972 tonnes at the start of the session. The price was down by 6% from the previous day, closing at R34.95 per pocket (10kg).

In the session, the market saw an uptick in deliveries owing to ongoing harvest activity in most parts of the country. This led to a 12% increase in daily stocks to 831 606 pockets (10kg bag).

RSA fruit:

The fruit market recorded widespread losses in yesterday’s trade session. The prices of apples and bananas were down by 1% and 3% from the previous day, closing at R8.21 and R7.03 per kilogram. These losses were mainly due to large stocks of 176 000 tonnes of apples and 210 000 tonnes of bananas.

The price of oranges declined by 4% from the previous day and settled at R4.63 per kilogram. This was also pressured by a recovery in stocks to 61 000 tonnes, from levels of below 30 000 tonnes in the past few days.

Full report attached below

Agbiz Morning Market Viewpoint on Agri-Commodities 08 March 2018

The post Weather could remain favourable through maize production season appeared first on Agri Limpopo.

Maize:

The weekend didn’t bring much improvement in soil moisture, the rainfall was quite scattered in a few areas, but mostly in regions of Mpumalanga and eastern Free State provinces. With that said, the maize crop that is currently moisture-stressed following last week’s dryness could soon receive relief as weather forecasts show a possibility of over 60 millimetres of rainfall within the next eight days.

Worth noting, but of lesser significance to the global market, is the effect of pest and diseases which continue to affect crops in the region. The recent report from the  Mozambican government suggests that more than 3 000 hectares of maize plantings have been affected by disease and pest infestations. 

In 2016/17 production season, Mozambique produced 2.0 million tonnes of maize up by 12 percent from the previous season. However, this was slightly below the annual maize consumption of 2.2 million tonnes, and this means that the country will resort to imports to boost supplies. At this point, it is unclear what the 2017/18 maize harvest will be, but reports of crop damage increase a chance of a decline in maize harvest. This could potentially increase Mozambique’s reliance on maize supplies in countries such as South Africa and Zambia.

Wheat:

Yesterday there was no new news in the local wheat market. The weather is not a main focus at the moment as it is an off-season period, but in the next two months or so, the weather will again take the spotlight ahead of the winter wheat planting season.

In provinces such as the Western Cape, soil moisture has not improved as there hasn’t been any meaningful rainfall in months. The weather forecasts for the next two weeks show a possibility of light showers along the coastal areas of the province in the week of 04 April 2018. This will however not lead to any improvement in soil moisture. Above all, it is unclear what the weather conditions will look like in the upcoming season.

Apart from the domestic development, Russia plans to increase its presence in the global wheat market. The country’s Ministry of Agriculture forecasts 2017/18 grain exports at 52 million tonnes, which is a 44 percent uptick from the previous season. About 71 percent of the expected exports is wheat, which is unsurprising following a notable increase in production this season.

Soybeans:

Some soybean growing areas of the country experienced light and scattered showers during the weekend. However, areas around Bethlehem, Frankfort, Kroonstad, Lindley, Ventersburg, Vrede, Warden, Balfour, Davel, Greyling Stad, Irene, Leandra, Lydenburg, Standerton and Vereeniging received rainfall of over 20 millimetres over the weekend. This bodes well for soybean crop as it is still at growing stages that require moisture.

This week promises heavy rainfall across the soybean growing areas of the country. Although unusual at this time of the season, hail remains a concern for the eastern parts of the country when there are expectations of heavy rainfall. The past few weeks brought a bit of hail in some regions of Mpumalanga and KwaZulu Natal province, but the crop damage was limited.

The soybean crop is generally in good condition and if there are no crop damages in the coming weeks, the country will stand a good chance of achieving the National Crop Estimates Committee’s estimate of a new record harvest of 1.4 million tonnes this season, up by 5 percent from the 2016/17 production season.

It is also worth noting that South Africa remains a net importer of soybean oil-cake (meal), but the volumes imported have declined from levels of close to a million tonnes in 2010. Last year, South Africa imported 553 003 tonnes of soybean oilcake, down by 15 percent from volumes imported in 2016. This decline was partly linked to improvement in soybean production in the 2016/17 production season, where the soybean harvest reached a record level of 1.3 million tonnes.

Argentina was a leading supplier with a share of 88 percent of total imports. Zambia, Malawi and the Netherlands were also amongst the key suppliers of oilcake to South Africa, according to data from Trade Map. 

RSA Potatoes:

After experiencing a good run in the past few days, the potatoes market pulled back in yesterday’s trade session owing to a large stock of 1.2 million pockets (10kg bag) at the start of the session. The price was down by 7 percent from the previous day, closing at R28.16 per pocket (10kg).

However, 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 during the weekend. This subsequently led to a 33 percent decline in daily stocks to 808 418 pockets (10kg bag).

RSA fruit:

The fruit market was under pressure in yesterday’s trade session owing to commercial selling, as well as large stocks. The prices of apples and bananas were down by 11 percent and 15 percent from the previous day, closing at R7.24 and R6.09 per kilogram, respectively. This was mainly on the back of large stocks of 179 000 tonnes of apples and 326 000 tonnes of bananas.

The price of oranges declined by 28 percent from the previous day and settled at R3.97 per kilogram due to commercial selling. With that said, we believe that these losses could be short-lived because of fairly lower stock of 53 000 tonnes, compared to levels of over 70 000 tonnes in the past few days.

Find full report attached to this e-mail.

Agbiz Morning Market Viewpoint on Agri-Commodities 20 March 2018

The post Maize crop could receive 60 millimetres of rainfall within next eight days 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.

South Africa’s average dam levels: week ended 26 March 2018, with the same week last year in brackets

Source: Department of Water and Sanitation and Agbiz Research

Maize:

In the fields, the maize crop is in good condition and could improve further following the recent rainfall. This week started on a dry and cool note, with clear skies over most sections of the maize belt. However, more rainfall could soon return but is expected to be in the form of fairly light and scattered showers.

The weather updates show a possibility of between 16 and 30 millimetres of rainfall over the maize growing areas of the country within the next two weeks. This will further improve soil moisture and benefit the crop, particularly the western sections of the Free State and North West provinces as the late planted maize is at stages of development that require high moisture.

Today the National Crop Estimates Committee will release its 2017/18 second production estimate for maize. Last month, the Committee placed its estimate at 12.2 million tonnes, higher than market expectations (although well below the previous season’s bumper harvest of 16.8 million tonnes). As highlighted in yesterday’s note, 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.

From a trade perspective, South Africa exported 29 107 tonnes of maize in the week of 23 March 2018, up by 5 percent from the previous week. About 88 percent of these exports were white maize, with 12 percent being yellow maize. The leading buyer was again Venezuela with a share of 59 percent. The rest went to other regional markets, such as Namibia, Lesotho, Swaziland and Mozambique, amongst others. Overall, this placed South Africa’s 2017/18 maize marketing year exports at 2.1 million tonnes, which equates to 88 percent of the season’s export forecast of 2.4 million tonnes.

Wheat:

South Africa’s wheat market is currently off-season, but the recent weather developments in the major winter wheat production province, Western Cape, are worth mentioning. Yesterday, the South African Weather Service indicated that between April and June 2018, parts of the south-western cape regions could receive above-normal rainfall .

Moreover, the near-term prospects are also positive. The weather charts for the next two weeks show a possibility of light showers of about 16 millimetres over the Western Cape province. While a welcome development, this will nonetheless not make a meaningful improvement on dam levels which are critically low, estimated at 18 percent in the week of 26 March 2018, down by a percentage point from the previous week and 8-percentage points from the corresponding period last year.

From a trade front, there were no imports last week, the last imports were in the week of 16 March 2018, recorded at 30 635 tonnes. All of this originated from Latvia. This placed 2017/18 marketing year’s wheat imports at 1.17 million tonnes, which equates to 63 percent of the seasonal import forecast of 1.85 million tonnes.

While a net importer of wheat, South Africa continues to export wheat to regional markets. The 23rd batch of exports this season was recorded at 1 228 tonnes, up by 85 percent from the volume seen in the week of 16 March 2018. The exports were destined to Botswana, Lesotho, Namibia and Swaziland. Overall, this placed South Africa’s 2017/18 wheat exports at 19 144 tonnes.

Soybeans:

South Africa’s soybean crop is in generally good condition across the country. The recent heavy rainfall over the eastern parts of South Africa did not cause crop damage. Instead, there was an improvement in soil moisture which is conducive for the late-planted crop.

The key focus today is on the National Crop Estimates Committee which will release its second production estimates for South Africa’s 2017/18 soybeans in the afternoon. Last month, the Committee placed its estimate at a new record harvest of 1.4 million tonnes. We don’t foresee major changes in this estimate as weather conditions have been fairly favourable since the last assessment.

Aside from production aspects, the most recent data from SAGIS shows that South Africa’s soybean stocks were at 330 566 tonnes in February 2018, which is almost treble the volume seen in the corresponding period last month. Also worth noting is that soybean consumption (crushed oil and cake) was at 78 073 tonnes in February 2018, double the volume utilised in February 2017.

Using an estimate of 2.2 million tonnes of South Africa’s soybean crushing capacity, which equates to 183 333 tonnes per month, the country utilised 43% of its monthly soybean processing capacity in February 2018, which is also 2 percentage points lower than the previous month but double the capacity utilisation in February 2017.

Sunflower seed:

After good rainfall in the past few days, the start of this week provided a breather, characterised by dry and cool weather conditions over sunflower seed growing areas. The crop is in good shape and could remain in a fair condition throughout the season as light showers are expected over the next two weeks.

Last month, the National Crop Estimates Committee placed South Africa’s 2017/18 sunflower seed production at 731 505 tonnes, down by 16 percent from the 2016/17 production season due to a decline in area planted. The Committee will release an update in the afternoon today. This month’s estimate could remain fairly unchanged from last month, and if there are any adjustments, it will possibly be upwards.

Apart from the production dynamics, South Africa’s sunflower seed consumption (crushed oil and cake) increased by 3 percent month-on-month to 81 347 tonnes in February 2018. Moreover, this is 17 percent higher than the volume utilised in the corresponding period last year.

RSA Fruit:

Yesterday the fruit market saw widespread losses owing commercial selling and large stocks. The prices for apples and bananas were down by 17 percent and 8 percent from the previous day, closing at R6.44 and R6.84 per kilogram, respectively.

In addition, the price of oranges was down by 26 percent from the previous day due to commercial selling and settled at R3.51 per kilogram. However, these losses could soon be reversed due to lower stocks of 32 000 tonnes, compared to levels of 73 000 the previous day.

Full report by Wandile Sihlobo available below.

Agbiz Morning Market Viewpoint on Agri-Commodities 28 March 2018

The post Dry and cool weather conditions over sunflower seed growing areas appeared first on Agri Limpopo.

Maize:

The South African maize crop is still at growing stages that require moisture, particularly in the late planted areas in the western sections of North West and Free State provinces. Following a dry and cool Easter weekend, the maize-belt could receive light showers this week which should further improve soil moisture and crop conditions. Moreover, the week of 18 April 2018 promises higher rainfall of over 30 millimetres across the maize growing areas of the country.

These developments bode well with South Africa’s 2017/18 total maize production, which is currently estimated at 12.42 million tonnes, down by 26 percent from last season’s record harvest . Importantly, this is higher than South Africa’s annual maize consumption of roughly 10.50 million tonnes.

To recap from our previous note, the expected 12.42 million tonnes of maize harvest coupled with expected large carryover stock underpin the view that South Africa could remain a net exporter of maize in the 2018/19 marketing year which starts on 01 May 2018, with exports estimated at 2.2 million tonnes. This is slightly below the current marketing year export forecast of 2.4 million tonnes.

The aforementioned estimates are commercial production, South Africa’s subsistence farmers’ maize production is estimated at 770 000 tonnes, up by 5 percent from the 2016/17 production season according to recent data from the United States Department of Agriculture.

Overall, a large carry-over stock from the current marketing year, sluggish exports and a relatively large domestic production is suppressing domestic maize prices and will continue over the medium term.

Wheat:

The South African wheat market is currently at the tail-end of the off-season and is now entering the new season as planting is set to commence next month. The rainy season, which starts at the end of this month, promises to be much better than the previous one. The South African Weather Service indicated that between April and June 2018, parts of the south-western cape regions could receive above-normal rainfall.

Over the weekend, the major winter wheat production province, Western Cape, received light and scattered showers. While a welcome development, this did not make a meaningful improvement on dam levels, which remain critically low, estimated at 18 percent in the week of 26 March 2018, down by a percentage point from the previous week and 8-percentage points from the corresponding period last year.

Looking ahead, the next eight days could bring dry and cool weather conditions across the Western Cape province, with the exception of the coastal areas which should receive light showers. Light rainfall of about 16 millimetres should, however, return in the week of 18 April 2018.

Above all, the near-term weather expectations indicate above-normal rainfall in winter crop growing areas, which include the next three months that fall within the critical planting period. The farmers’ intentions to plant data for winter wheat will be released on 25 April 2018.

On the global front, the United States Department of Agriculture (USDA) forecasts a 3 percent increase in 2018 all-wheat plantings to 47.30 million acres. This includes winter wheat, durum wheat and spring wheat area plantings. This could boost the US wheat production in the 2018/19 production season.

Soybeans:

One factor that we are watching closely over the long weekend is weather as it could still affect the soybean crop, both late-planted and on-time-planted areas. In the last week of March 2018, there were fears that the rainfall could cause crop damage, as a large part of the crop has already matured.

Fortunately, farmers’ assessments point to an improvement in soil moisture, with no crop damage, which is conducive for the late-planted crop. The long Easter weekend brought a breather, as a number of areas experienced cool and drier weather conditions. The rainfall will, however, return within the next eight days, but could be light and possibly not lead to any crop damages.

Overall, these developments support the National Crop Estimates Committee’s view of a new record level of 1.39 million tonnes of soybean production. Moreover, this is 6 percent higher than the harvest in the 2016/17 production season. This improvement in production is underpinned by an increase in area planted and expectations of fairly good yields, about 1.77 tonnes per hectare.

As previously highlighted, the expected large harvest could lead to a decline in seasonal imports to levels around 20 000 tonnes. This will be a remarkable improvement following imports of 28 000 in 2017/18 marketing year and 271 098 tonnes in the 2016/17.

Furthermore, this could lead to a decline in soybean oil imports. In 2017, South Africa imported 191 255 tonnes of soybean oil down by 5 percent from the previous season. The leading suppliers were Argentina, Netherlands and Spain, amongst others. South Africa’s soybean oilcake imports could also decline. 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.

Sunflower seed:

Although lifted by 2 percent from the initial estimate to 749 205 tonnes, South Africa’s 2017/18 sunflower seed production is still 14 percent lower than the previous season’s harvest. This is due to a 5 percent decline in area planted to 601 500 hectares, as well as expected lower yields. The yields are estimated at 1.25 tonnes per hectare, compared to 1.37 tonnes per hectare in 2016/17 production season.

These production dynamics suggest that South Africa could remain a net importer of sunflower seeds. The Supply and Demand Estimates Committee forecasts South Africa’s sunflower seed imports at 500 tonnes in the 2018/19 marketing year, down by 10 percent from the previous season. The decline in mainly on the back of the relatively large opening stock, which boosted the supplies.

It is also worth highlighting that South Africa could remain a net importer of sunflower seed oil (crude). Over the past five years, South Africa’s sunflower oil imports grew by an average 2 percent a year, reaching 144 783 tonnes in 2017. The leading suppliers were Bulgaria, Argentina, Romania, Spain, Netherlands and Portugal, amongst others .

Given the expected decline in sunflower seed production this season, we estimate that South Africa’s sunflower oil imports could at least reach 147 678 tonnes. The leading supplies will most likely remain unchanged, as it has been the case in the past five years.

RSA Potatoes:

To recap pre-Easter weekend market trends, the potatoes market pulled back on Thursday from the fairly higher price levels seen Wednesday, with the price down by a percentage point, settled at R45.87 per pocket (10kg). This was partially on the back of a large stock of 686 792 pockets (10kg bag) at the start of the session.

Nonetheless, towards the end of the trading session, the market saw an uptick in deliveries driven by an ongoing harvest activity in some parts of the country. This led to a 4 percent increase in daily stocks to 717 526 pockets (10kg bag).

Full report by Wandile Sihlobo attached below.

Agbiz Morning Market Viewpoint on Agri-Commodities 03 April 2018

The post Farmers’ assessments point to an improvement in soybean soil moisture appeared first on Agri Limpopo.

One of the key reasons behind this downward revision of wheat import tariffs is the increase in international wheat prices (US Hard Red Wheat No.2), which was supported by unfavourable weather conditions in the US wheat growing regions. To recap, the adjustments in the wheat import tariff are satisfied when the international wheat price deviates from the base price by more than US$10 per tonne for three consecutive weeks.

With that said, these rates are not yet applicable. The current import tariff is R716.33 per tonnes (see Chart below). The newly calculated rates will only be applicable after publication in a government gazette. The timeframe for this process is unclear. The import tariff will expectedly decline to R394.85 per tonne first, and then go down further to R293.74 per tonne.

Aside from wheat import tariff matters, the favourable weather conditions have brought a bit of optimism in summer and winter crop producing areas of South Africa.

Chart: South African wheat import tariff

Source: SAGIS, Agbiz Research    

Full report by Wandile Sohlobo available in the attachment.

South African Agricultural Commodities Weekly Wrap 06 April 2018

The post Wheat import tariff triggered again to R293.74 per tonne appeared first on Agri Limpopo.