The USDA lifted its estimate for South Africa’s maize production

• Last week, the United States Department of Agriculture (USDA) lifted its estimate for South Africa’s 2017/18 maize production by 300 000 tonnes from the previous month to 13.5 million tonnes. While above market expectations, this is lower than the previous season’s record harvest of 17.6 million tonnes due to a decline in area planted and expectations of average yields in some areas.
• It is worth noting that the USDA’s data covers both commercial and non-commercial production, hence the numbers differ from the National Crop Estimates Committee’s (CEC) one which mainly focuses on commercial production. The non-commercial production, which is mainly subsistence farming accounts for a 6 percent share in the estimated harvest of 13.5 million tonnes. Therefore, the USDA’s commercial maize production estimate is almost at par with the CEC’s estimate of 12.8 million tonnes.
• The key message from these numbers is that South Africa’s maize market will be well supplied in the 2018/19 marketing year. The total maize supplies could reach 16.4 million tonnes, well above the local demand of 10.7 million tonnes, according to data from the national Supply and Demand Estimates Committee. The supplies data includes an opening stock and expected production.
• This essentially means that South Africa’s 2018/19 marketing year maize exports could, at least, amount to 2.3 million tonnes, down by 4 percent from the volume exported in 2017/18. Most importantly, this suggests that the SAFEX maize prices could remain at relatively lower levels for some time, all else being equal.

Full report by Wandile Sihlobo below:

Agbiz Morning Market Viewpoint on Agri-Commodities 14 May 2018