summer crop – Agri Limpopo

South African Agricultural Commodities Weekly Wrap

Arithmus — Fri, 05 Oct 2018 06:50:48 +0000

The 2018/19 summer crop production season started on a positive footing with forecast showers in most parts of the country in the week of 20 October 2018. This will help improve soil moisture which will be beneficial for the planting activity.
The optimal window for maize and soybean planting opened this week in the eastern and central parts of the country and will run until the end of November in the case of maize, and beginning of December for soybeans. It is still unclear what the season will turn out to be; we will get a clearer guidance later this month when the Crop Estimate Committee releases its data on ‘farmers intentions to plant’.
The major risk in the near term is the forecast El Niño, but we are also waiting for an update about its development from the weather forecasters this month end. Aside from this, it was a fairly quiet week in the South African market with no major data releases.
The SAFEX beef carcass market experienced a quiet week with prices unchanged from levels seen last week. In terms of the supply, the South African farmers slaughtered 211 951 head of cattle in August 2018, down by 11 percent from August 2017 due to the herd rebuilding process after a reduction during the 2015-16 drought.

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Solid recovery in South African tractor sales in September 2018

Arithmus — Mon, 08 Oct 2018 15:09:35 +0000

After experiencing a double-digit decline in August 2018 due to delayed harvest, amongst other factors, South Africa tractor sales recovered by 11% y/y in September 2018, with 612 units sold (Figure 1). This somewhat signals farmers’ readiness for the 2018/19 summer crop production season which commenced this month, although planting activity hasn’t progressed much thus far. Broadly speaking, this is an encouraging reading as we continue to monitor the investment path in the South African agricultural sector following a slowdown in the Agribusiness Confidence Index in the third quarter due to continued uncertainty underpinned by the current land policy reform proposal, amongst other issues.

September 2018 tractor sales data showed that South African farmers are somewhat prepared for the 2018/19 summer crop planting activity which commenced this month in the eastern and central parts of the country, with western regions set to begin in November. In addition, we suspect that some tractor sales which would typically have been made in August also rolled over to September due to the late summer crop harvest process which weighed on farmers’ finances. This also explains the 18% y/y decline in tractor sales in August 2018.
The combine harvester sales more than doubled the previous year’s volume in the corresponding month, with about 11 units sold. The summer crop harvest process has been completed, therefore the optimism is partly on the back of expected higher yields in the winter crop producing regions. In fact, our recent interaction with Western Cape farmers suggests that the harvest process in winter crops could start by end of this month.
While we are optimistic about the South African agricultural machinery sales in the near term, the key factors that could potentially change this path are the weather conditions given the talks of a possible El Niño, weakening rand against the US dollar and farmers’ intentions to plant data which is due for release this month.

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Sourced: Agbiz research

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Good Rain, Good Start of the Planting Season

Arithmus — Mon, 29 Oct 2018 08:31:19 +0000

South Africa’s summer crops could have a good start of the season as the weather forecasts for the next two weeks show prospects of rainfall over most parts of the country. Admittedly, while this is a welcome development, it also means that planting activity in some areas could be slightly delayed. But this is not much of an issue as the planting window for most crops will remain open until December 2018, particularly white maize and sunflower seed in the western parts of South Africa.
So, while numerous factors such as the ZAR/USD exchange and the Chicago grain and oilseed price movements could influence the SAFEX grain and oilseed prices, we believe that the weather will be an important driver of prices within the next four months or so, specifically the new season contracts.
In today’s morning note, we explore the potential impact of the weather outlook per crop, but also comment on the recent data releases, with a key focus on SAGIS month figures. The SAGIS monthly data is important for a number of reasons, with the key one being the fact that it presents the monthly consumption figures and also current stock or inventories.

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Sourced: Agbiz, Agribusiness Research

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The Weather will remain a Key Driver of SA Grains and Oilseed Market until February 2019

Arithmus — Wed, 31 Oct 2018 09:25:50 +0000

Between October and February, which is typically planting to pollination, the weather becomes an important factor in the South African grains and oilseeds market and, to some extent, a major driver of prices. While there are concerns about a possible El Niño later in summer, the season started on sound footing with widespread rainfall in the eastern and central parts of the country. Moreover, farmers have also shown some optimism as the summer grains and oilseed area plantings are set to increase by 5 percent year-on-year to 4.03 million tonnes in the 2018/19 production season.
So far, the planting activity has been fairly good in the eastern parts of the country. These good conditions could gain momentum over the coming weeks, not only because the optimal planting window will narrow around mid-month, but also due to a largely favourable weather outlook.
The weather charts this morning currently show prospects of between 20 and 90 millimetres of rainfall over the summer crop growing provinces within the next two weeks. Admittedly, higher rainfall could potentially slow the planting activity in some areas, but potential improvement in soil moisture will have far enriching benefits to the crops later in the season. Possible planting delays will not be much of an issue as some areas could still plant outside of the optimal period, although yield levels could be slightly affected.
The impact of the favourable near-term weather prospects on prices has been muted. For example, yellow maize is up by over 15% y/y at R2 401 per tonne on 30 October 2018. At the same time, white maize price up by roughly 21% y/y at R2 411 per tonne. This looks as if the market is somewhat pricing in the potential decline in production on the grounds of a possible El Niño.
Be that as it may, other institutions such as the International Grains Council are fairly optimistic about South Africa’s 2018/19 maize production at 12.3 million tonnes, down 9% year-on-year (commercial and non-commercial maize) from anticipated lower yields on the back of the forecast El Niño weather phenomenon later in the summer.
To be clear, with a harvest of 12.3 million tonnes, South Africa would remain a net exporter of maize until April 2020. By and large, as a country, we consume about 10.8 million tonnes of maize a year and we will probably have about 3.3 million tonnes of stocks when the 2019/20 marketing year starts in May 2019.
If we add the expected production of 12.3 million tonnes to the potential 3.3 million tonnes of stocks, South Africa’s maize supplies will be in good shape over the next two years, all else being equal.
Aside from maize, the planting activity is underway in other summer crops such as soybean and the farmers are expected to plant a record level of 851 800 hectares. Similar to other crops, the weather will be a key determinant of the overall production. Worth noting, however, the soybean pollination stage could fall in within the rainy period (before El Nino), especially the areas that planted early, which increases a chance of higher yields.

Winter Crops

The weather outlook over the winter crop growing areas of the Western Cape province shows clear skies for the next two weeks, which is a good window for the harvest process that is currently underway. As set out in our previous notes, South Africa’s winter wheat production is estimated at 1.86 million tonnes, well above the previous season’s area of 1.54 million tonnes. The improvement is on the back of higher yields and an expansion in overall area planted.
But some areas of Swartland were hard hit by heavy winds and rainfall in the past few days, which negatively affected the quality and the volume of the crop. Hence, we believe that the Crop Estimate Committee will release its production estimate down next month form the current estimate of 1.86 million tonnes. In terms of prices, the South African wheat prices are up marginally from last year, with the spot price closing at R4 422 per tonnes on 30 October 2018.
We are on the road today, we will be back with the usual Agbiz Morning Market Viewpoint tomorrow, 01 November 2018.

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Sourced, Agbiz, Agribusiness Research

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Good weather, good planting pace

Arithmus — Mon, 19 Nov 2018 09:45:23 +0000

The key highlight this morning is the prospect for good rainfall of roughly 20 to 90 millimetres over most summer crop growing areas of South Africa within the next two weeks. This will help ease the heat stress that was starting to build up in the past few days in the areas that have already planted, specifically Mpumalanga, parts of Gauteng and Free State. Most importantly, the yellow maize planting window is narrowing in the eastern parts of South Africa, which could be closing this week, and therefore improvement in moisture will enable farmers to complete the planting process. In terms of soybeans, the areas that have not yet completed the planting process still have time until the end of the year.
The areas in the western parts of South Africa, which predominantly produce white maize and sunflower seed, have not received any notable rainfall since the start of the season. And therefore, planting activity has not commenced. This, however, is not a significant concern as the optimal planting window will be open until December in the case of white maize, and beginning January 2019 in the case of sunflower seed. Therefore, the expected rainfall within the next two weeks is exactly what is needed to stimulate the planting process.
From an area planting perspective, there is still some optimism in the market that the 2018/19 summer crop plantings could reach 4.03 million hectares, up by 5 percent from the previous season. An update of this figure will be released at the end of January 2019. In the coming weeks, we will closely monitor the planting activity.
Aside from production conditions, most grains and oilseeds prices were under pressure on Friday, partly due to the relatively stronger rand against the US dollar. Today, the ZAR/USD exchange, weather conditions and Chicago grain and oilseed price movements will be amongst the key factors driving SAFEX grain and oilseed prices.
Also worth noting is that the dam levels have improved significantly in the Western Cape, thanks to the recent rainfall (see Figure 1 below).

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Sourced: Agbiz, Agribusiness Research

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