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 South African Weather Service recently revised its view from a weak La Niña phase to a neutral phase from this month through autumn season. Nonetheless, there is still a possibility of above-normal rainfall in most parts of the country over the observed period. This bodes well for maize crop which still needs moisture at its current stage of development.

In the near term, the weather charts currently show a possibility of widespread showers across the maize belt within the next two weeks. This should further improve soil moisture and benefit the crop. Again, this slightly reinforces the National Crop Estimates Committee’s view of a fairly good crop of 12.2 million tonnes in the 2017/18 production season.

Last week’s maize exports were quite disappointing. South Africa exported 14 672 tonnes, down by 43% from the volume exported in the week of 23 February 2018. About 65% of these exports were white maize, with 35% being yellow maize. This placed South Africa’s 2017/18 maize marketing year exports at 2.0 million tonnes, which equates to 83% of the season’s export forecast of 2.4 million tonnes.

Wheat:

As we set out in our note on Monday, at the moment the weather is of less importance in the winter wheat growing areas of South Africa as it is an off-season period. Also worth noting is that the Western Cape province is a winter rainfall area, therefore it is unsurprising that the next two weeks could remain dry and cool.

Nonetheless, the expected dryness implies that dam levels could remain critically low in the near term, thus negatively affect households and other agricultural activities such as livestock and horticulture.

The most recent data from the Department of Water and Sanitation shows that on 05 March 2018, the province’s dam levels averaged 20%, down by one percentage point from the previous week and 10 percentage points from the corresponding period last year.

Apart from the weather aspects, South Africa continues to receive large volumes of wheat imports. The country imported 90 094 tonnes in the week ending 02 March 2018, up by 53% from the previous week. About 43% from Latvia, 32% from Argentina and 25% from Romania. This placed 2017/18 marketing year’s wheat imports at 1.07 tonnes, which equates to 58% of the seasonal import forecast of 1.85 million tonnes.

Although a net importer of wheat, South Africa continues to export wheat to regional markets. The 20th batch of exports this season was recorded at 802 tonnes and went out last week. This was destined to Botswana, Lesotho and Namibia. Moreover, this is well below the previous week’s exports of 2 165 tonnes. Overall, South Africa’s 2017/18 wheat exports currently stand at 16 791 tonnes.

Sunflower seed:

The start of this week has been fairly dry and cool across the sunflower seed growing areas of South Africa. It is only Hoopstad, Wesselsbron, Derby and Ventersdorp areas of North West and western Free State provinces that received light showers on Monday evening.

With that said, the overall sunflower seed region is set to receive good showers within the next two weeks. The current weather forecasts show a possibility of between 16 and 50 millimetres of rainfall. The amount of rainfall might vary from the region by region, but the charts show an overcast across the summer crop growing areas.

Backing these forecasts is also the South African Weather Service’s report which noted a possibility of above normal rainfall within the next two months across summer rainfall areas, which should support the late-planted crop as its still needs moisture.

RSA Potatoes:

Yesterday the potatoes market managed to claw back some of its recent losses owing to strong commercial buying interest. The price was up by 8% from the previous day, closing at R37.13 per pocket (10kg).

In the session, the market saw an uptick in deliveries as harvest activity picks up after a quiet period in the weekend. This led to an 11% increase in daily stocks to 739 972 pockets (10kg bag).

SAFEX Beef:

In yesterday’s trade session the SAFEX beef carcass market presented more of the same. The price remained flat from the previous day, settled at R44.50 per kilogram due to thinly trade volumes.

From a supply point of view, the South African farmers slaughtered 188 737 head of cattle in January 2018, down by 21% from the previous month and 10% from the corresponding period last year. We did expect a bit of softening in slaughtering activity after festive season demand, but the scale of it came as a surprise.

It appears that still rebuilding their stock following a reduction during the 2015-16 drought. Lower maize prices and good recovery in pastures have also provided a good environment for the cattle stock rebuilding process.

Full report available below.

Agbiz Morning Market Viewpoint on Agri-Commodities 07 March 2018

The post Sunflower seed region set to receive good showers within next two weeks appeared first on Agri Limpopo.