Dry and cool weather conditions over sunflower seed growing areas

Highlights in today’s morning note

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