RSA fruit: Yesterday the fruit market managed to claw back some of its recent losses with support coming from strong buying interest. The price of apples was up by 9% from the previous day, closing at R6.91 per kilogramme. The bananas and oranges prices were, respectively, up by 0.14% and 11% from the previous day, closing at R7.01 per kilogramme and R3.09 per kilogramme. 

Maize: The National Crop Estimate Committee (CEC) revised its maize production estimates up by 2% from the previous month to 15.97 million tonnes. This is above the market expectations of 15.80 million tonnes and doubles the previous season’s production of 7.78 million tonnes.

Wheat: The CEC’s preliminary wheat planting data shows that farmers reduced the area planted in 2017 by 2% from the previous season to 498 850 hectares. This decline in the area was due to some farmers switching to barley and canola owing to profitability reasons.  

Click here to read the Morning Market Viewpoint on Agri-Commodities for today.

Soybeans: In its sixth production estimate, the CEC maintained its soybean production estimate unchanged from last month at 1.34 million tonnes. This is 81% higher than the previous season and the biggest crop on record. 

Sunflower seed: The CEC left its production estimate unchanged from the previous month at 821 970 tonnes. This is 9% higher than the previous season due to expected higher yields. The harvest process is virtually over with above average yields reported in many areas of the country. This supports the CEC’s view of a relatively large crop this season. 

RSA Potatoes: The South African potatoes market lost ground in yesterday’s trade session and closed in negative territory due to relatively large stocks of 846 765 bags (10kg bags). The price was down by 5% from the previous day, closing at R28.67 per kilogramme.

The post Fruit market claws back some recent losses. appeared first on Agri Limpopo.

The recent update for the week ending 31 July 2017 shows that dams averaged 27%, compared to 55% in the same period last year. The medium term forecasts present some hope, as the South African Weather Service’s indicated that there is a possibility of wetter conditions in the south western parts of the country between August and October 2017. 

Highlights in today’s morning note

Wheat:

Last week, the Southern Cape region of the Western Cape province received light showers of between 3 and 6 millimetres, which is not sufficient to make an improvement on crop conditions. Meanwhile, other regions of the province remained dry and cool. Overall, the crop is not in good shape and urgently needs moisture in order to develop well this season. 

Maize:

The lower maize prices that were seen in the past few days sparked buying interest amongst market participants, thus leading to bargain-buying in Friday’s trade session. Moreover, the weaker Rand against the US Dollar, as well as higher Chicago maize prices also added support to the maize market. 

Click here to read more.

Soybeans:

There was not much happening in the domestic soybean market as harvest process is already complete. Looking ahead, the domestic soybean market will largely be guided by the Chicago (soybean) price and domestic currency movements.

Sunflower seed:

The harvest process is virtually over with few patches left in the western areas of the North West province. The forecast dry and warm weather conditions within the next two weeks could allow farmers to complete the process smoothly.

RSA Potatoes:

The South African potatoes market lost ground in Friday’s trade session and closed in negative territory due to relatively large stocks of 1.21 million bags (10kg pockets/bag). The price was down by 2% from the previous day, closing at R28.46 per 10kg pocket.

SAFEX beef:

In Friday’s trade session, there was not much happening in the SAFEX beef carcass market. The price remained unchanged from the previous day, closing at R46.00 per kilogramme. However, it is worth noting that the SAFEX beef carcass prices could differ from the physical market due to thinly traded volumes at the stock exchange.

RSA fruit:

The fruit market ended the day mixed in Friday’s trade session. The prices of apples and bananas were down by 5% and 4% from the previous day, closing at R7.14 per kilogramme and R5.66 per kilogramme, respectively. Meanwhile, the price of oranges gained 0.34% from the previous day, closing at R2.95 per kilogramme. 

The post Medium term forecasts present some hope. appeared first on Agri Limpopo.

This is a data-packed week, with the National Crop Estimate Committee’s seventh maize production estimates and SAGIS weekly data due for release. Any notable changes in these particular data points could lead to movements in the maize markets.

Highlights in today’s morning note

Maize:

Reuters analyst’s survey shows that South Africa’s maize production could be revised up by 1% from the previous estimate to 16.14 million tonnes. Meanwhile, Bloomberg’s survey indicates that the maize crop production estimate could remain unchanged at 15.97 million tonnes. 

Click here to read more.

Soybeans:

The expected uptick in production means that South Africa might see minimal imports of soybeans in the 2017/18 season, which will be a remarkable improvement following 2016/17 imports of 271 098 tonnes. The country imported 4 095 tonnes of soybean in July 2017, placing the country’s total imports to 13 028 tonnes.

Sunflower seed:

In terms of trade, South Africa exported 8 tonnes of sunflower seed to Swaziland and Namibia in July 2017. This brought the country’s 2017/18 sunflower seed exports to 117 tonnes. About 69% went to Swaziland, 19% to Botswana and 12% to Namibia.

RSA Potatoes:

The South African potatoes market saw marginal gains in Friday’s trade session with the price up by 0.81% from the previous day, closing at R32.32 per pocket (10kg). These gains came on the back of relatively lower stocks in the market.

SAFEX beef:

The SAFEX beef market has not shown any notable movements this month due to thinly traded volumes. The price remains flat at R46.00 per kilogramme. This means that the SAFEX beef carcass prices could differ from the physical market prices.

RSA fruit:

The fruit market ended the day mixed on Friday’s trade session. The prices of apples and oranges were up by 3% and 15% from the previous day, closing at R7.65 per kilogramme and R3.74 per kilogramme, respectively. Meanwhile, the price of bananas was down by 8% from the previous day, closing at R4.72 per kilogramme. 

Click below for previous reports:

Agbiz Morning Market Viewpoint on Agri-Commodities: 22 August 2017

Agbiz Morning Market Viewpoint on Agri-Commodities: 23 August 2017

Agbiz Morning Market Viewpoint on Agri-Commodities: 24 August 2017

South African Agricultural Commodities Weekly Wrap: 25 August 2017

The post Maize production estimates due for release. appeared first on Agri Limpopo.

As we set out in our note on 28 September 2017, the broad deceleration in food producer inflation is due to a robust summer crop harvest, as well as improving slaughtering activity, particularly cattle and sheep.  

Meat and meat products price inflation eased to 16.5% y/y in September 2017, from 16.8% y/y in the previous month. This was largely driven by the improvement in cattle and sheep slaughtering activity. About 228 632 head of cattle were slaughtered in August 2017, up by 12% from the previous month.  At the same time, 374 838 head of sheep, which is an 11% monthly uptick.

For now, it is unclear whether this will be a temporary blip or a continuous recovery. We will get more clarity tomorrow, 27 October 2017, when the Red Meat Levy Admin releases the figures for September 2017. Within the meat and meat products basket, the spread of avian influenza remains a major concern, although it has, so far, largely affected layers for egg production. 

A slight uptick in dairy products price inflation to 1.7% y/y in September 2017 came as no surprise. It is merely a reflection of seasonal trends. We expect dairy products inflation to soften in the coming months, in anticipation for improvement in grazing veld and milk production during the summer rainfall season.

Apart from avian influenza, large agricultural output and positive prospects for the new summer crop season will keep commodity prices under pressure over the short-to-medium term, which should contain food products’ inflation at relatively lower levels.   

Click below to read more recent reports by Wandile Sihlobo.

PPI UPDATE: SA food products price inflation slows to 1.3% year on year

The post PPI UPDATE: SA food products price inflation slows to 1.3% y/y appeared first on Agri Limpopo.

The planting activity for the 2017/18 production season is underway in the summer rainfall areas of the country. South African farmers intend to increase the total area plantings by 1% from the 2016/17 production season to 4.03 million hectares. The optimal planting window for maize in the eastern parts of the country closes in mid-November. The western areas only begin planting maize in mid-November, with the optimal planting window closing at the end of December. For oilseeds, the optimal planting window closes in early January.

As we set out in our previous reports, there is optimism regarding the 2017/18 production season. The South African Weather Service suggests that the summer crop growing areas of the country could receive above normal rainfall between November 2017 and February 2018, which will benefit the crops.

The combine harvester sales were up five folds from the previous month and 11% y/y, with 20 units sold in October 2017 (Chart 1). This is in line with an increase in activity in winter crop growing areas as harvest process commences, particularly wheat growing areas of the Western Cape province.

Looking ahead – We expect the tractor sales to soften in the near term as summer grain and oilseed planting process approaches the completion stages. The combine harvesters’ sales could remain solid over the near term as winter crop harvest process continues. An important factor to monitor in the long term is the cost of servicing the farm debt as that would have direct implications on the agricultural machinery sales.

Note: In 2016, South Africa’s total farm debt was at R144.9 billion, which is a record level in a database starting from 1980.

Click below to read more recent reports by Wandile Sihlobo.

UPDATE SA tractor sales at a highest level in 20 months

The post UPDATE: SA tractor sales at the highest level in 20 months appeared first on Agri Limpopo.

Although the estimate for total maize production is set to decline significantly from the 2016/17 production season, the expected 12.2 million tonnes means that South Africa is in for a good crop. If weather conditions remain favourable, as forecasters suggest, then the country will be well supplied in the 2018/19 marketing year which starts in May 2018 and ends in September 2019. In detail, white maize crop is estimated at 6.1 million tonnes, down by 38% y/y. Yellow maize crop is also estimated at 6.1 million tonnes, down by 11% y/y.

Moreover, the 2017/18 soybean production is estimated at 1.4 million tonnes, up by 5% from the previous season owing to an increase in area planted, as well as expectations of higher yields. This is somewhat unsurprising given that the eastern sections of South Africa received fairly good rainfall throughout the season.

With the exception of dry beans, all other crops registered a decline from levels seen in 2016/17 production season (Chart 1, other small grain not included in the chart). It is worth noting however that these are first production estimates, which means there could still be changes in the coming months, but will most likely be on the upside given the expectations of favourable weather conditions from this month until April 2018.

Click below to read the full report by Wandile Sihlobo

South Africa is in for a good grain harvest, despite the decline in area planted

The post South Africa in for a good grain harvest, despite decline in area planted 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.

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.

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.

Maize:

Over the weekend, the Free State province received light and scattered showers, which were however not sufficient to make a meaningful improvement in soil moisture. With that said, the maize crop is in fairly good condition across the country.

The areas that are somewhat moisture-stressed following dryness in the past few days could soon see some relief, as the weather forecasts for the next two weeks show a possibility of rainfall of between 20 and 60 millimetres.

As indicated in yesterday’s note, the United States Department of Agriculture (USDA) forecasts South Africa’s 2017/18 maize production at 13.0 million tonnes (down by 26 percent from last year) .

Worth noting, but of lesser significance to the global market, is a possible uptick in Mali’s maize harvest. The official estimate from the country’s Ministry of Agriculture points to a 15 percent year on year uptick in 2018/19 maize production to 3.9 million tonnes. This improvement is largely on the back of an increase in area planted.

Wheat:

South Africa’s wheat market is currently off-season, and therefore, most activity is in import trading. The past season’s drought resulted in a lower harvest in the Western Cape province, which subsequently led to a 20 percent year-on-year decline in 2017 national production to 1.5 million tonnes.

The Western Cape is a winter rainfall area. Despite the urgent need for rain, there a slim chance of sufficient showers in that province within the next couple of weeks. The winter wheat growing areas will, nonetheless, need moisture within the next two months or so ahead of the new planting season. At this point, it is unclear what the weather conditions will look like in the upcoming season.

Apart from the domestic development, the global market remains well supplied after the USDA supply and demand estimates reports showed a slight upward revision in 2017/18 global wheat production estimate to 759 million tonnes. This is three percent higher than the previous season. Russia and India were the leading contributors to this increase in production.

From a demand front, the 2017/18 global wheat imports are estimated at 182 million tonnes, slightly higher than the previous month’s estimate of 180 million tonnes and seven percent higher than the previous season. Southeast Asia, Middle East and North Africa and Sub-Saharan Africa regions are set to be amongst the key importers.

Sunflower seed:

The expected rainfall this past weekend did not materialise in most sunflower seed growing areas. It is only a few areas around Bloemfontein, De Brug, Viljoenskroon and Losdoorns that received light showers of between 5 and 13 millimetres.

With that said, soil moisture is generally in fair condition following the recent rainfall. The crop that is slightly moisture-stressed following dryness in the past few days should soon recover as weather conditions promise rainfall within the next two weeks.

With the late planted sunflower seed crop still at early stages of development in regions around Delareyville, Sannieshof and Lichtenburg in the North West province, the expectation of a prolonged rainfall pattern this season should provide sufficient moisture for crop development.

RSA Potatoes:

The potatoes market started the week on negative footing owing to a large stock of 934 899 tonnes at the start of the session. The price was down by four percent from the previous day, closing at R33.02 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 31 percent decline in daily stocks to 644 269 pockets (10kg bag).

RSA fruit:

The fruit market also started the week on a negative footing with prices under pressure due to an uptick in daily stock. The price of apples and bananas were down by six percent and a percentage point from the previous day, closing at R7.27 and R7.19 per kilogram, respectively. These losses were underpinned by a large stock of 220 000 tonnes of apples and 301 000 tonnes of bananas.

Moreover, the price of oranges fell by two percent from the previous day and settled at R7.69 per kilogram. This will, however, be short-lived because of fairly lower stock of 26 000 tonnes, compared to levels of over 70 000 tonnes in the past few days.

Click below for the full report.

Agbiz Morning Market Viewpoint on Agri-Commodities 13 March 2018

The post Maize crop in fairly good condition across country appeared first on Agri Limpopo.