Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.

Maize:

Most parts of the South African maize belt received good rainfall in the past five days. A number of regions in the western parts of the country received rainfall varying between 20 and 110 millimetres. Some regions in the eastern parts of the country received rainfall of between 20 and 97 millimetres.

The forecast for the next two weeks presents a possibility of continuous rainfall across the South African maize belt. This should improve soil moisture and subsequently benefit the crops in areas that managed to plant on time.

The National Crop Estimates Committee will release its preliminary planting estimates data for South Africa’s 2017/2018 maize crop this afternoon (30 January 2018). At the beginning of the season, South African farmers intended to plant 2.47 million hectares of maize, down by 6% from the 2016/2017 production season. About 57% was set to be white maize, with 43% being yellow maize.

The most recent poll of analysts from Reuters suggests that South Africa’s 2017/2018 maize hectares could decline by 18% from the previous season to 2.16 million hectares. Moreover, this is 13% lower than the farmers’ intentions that were released in October 2017. Bloomberg’s analysts’ survey suggests that total maize plantings could be revised down to 2.15 million hectares.

These expectations are underpinned by persistent dry conditions and extreme heat experienced in the past few weeks in the western parts of South Africa. This has prevented farmers from fully utilising their intended area.

Wheat:

The main focus today (30 January 2018) is on the National Crop Estimates Committee which will release an update of South Africa’s 2017 winter wheat production estimate. Last month (December 2017), the Committee placed its estimate at 1.48 million tonnes, which is 23% lower than the volume produced in the previous season.

Market consensus is that production could be revised down by 2% from the previous estimate to 1.45 million tonnes. This would be a 24% decline from the 2016 harvest.

Other observers such as the International Grains Council are slightly more optimistic. The Council forecasts that South Africa’s 2017 wheat production at 1.60 million tonnes, which is 8% higher than the current estimate of the National Crop Estimates Committee.

Soya beans:

Bethlehem, Fouriesburg, Frankfort, Harrismith, Heilbron, Kroonstad, Reitz, Theunessen, Vrede, Warden, Amersfoort, Balfour, Graskop, Greylingstad, Kriel, Lydenburg, Morgenzon, Standerton, Vereeniging and Wonderfontein in the eastern Free State and Mpumalanga provinces received light showers of between 20 and 97 millimetres over the past five days.

The soya bean growing areas of South Africa could experience a boost in precipitation during the next two weeks which should improve soil and crop conditions. Recent assessments show that the soya bean crop is generally in good conditions, despite the recent.

The preliminary soya bean plantings estimate data for 2017/2018 production season is due for release  this afternoon (30 January 2018). In October 2017, farmers planned to plant 720 000 hectares of soy beans.

Analysts’ surveys show that the eastern regions successfully planted the intended area, but experienced crop damage in some areas due to unfavourable weather conditions. The North West province, a relatively small soya bean producer, planted roughly 85% of the intended area due to drier weather conditions.

Sunflower seed:

Allanridge, Bothaville, Bultfontein, Hoopstad, Losdoorns, Viljoenskroon, Wesselsbron, Bloemhof, Delareyville, Derby, Leeudoringstad, Lichtenburg, Potchefstroom, Schweizer-Reneke and Ventersdorp in the western Free State and North West provinces received good rainfall over the past five days, varying between 20 and 110 millimetres.

Weather forecasts indicate that there is an increased chance of additional rainfall of between 25 and 90 millimetres during the next eight days. This will improve soil moisture and subsequently benefit the sunflower seed crops in areas that have already planted.

It is, however, a bit late for additional plantings. The sunflower seed optimal planting window closed on 20 January 2018. Planting outside the window could negatively affect crops due to frost later in the season, which will, in turn, lower the yields.

On the data calendar, the National Crop Estimates Committee will release its preliminary planting estimates data this afternoon (30 January 2018). In October 2017, farmers intend to plant 65 500 hectares of sunflower seed in the 2017/2018 production season, up by 5% from the previous season.

Potatoes:

The South African potato market started the week (29 January 2018) on a negative footing owing to a large stock of 966 727 pockets of 10kg bags at the start of the trading session. The price was down by 2.47% from the previous day (28 January 2018), closing at R36.77 per pocket.

However, during the day (29 January 2018), the market experienced commercial buying interest, coupled with relatively lower deliveries on the back of slow harvest activity over the weekend (ending 28 January 2018). This subsequently led to a 32% decline in daily stocks to 657 179 pockets.

SAFEX lamb carcass:

Yesterday (29 January 2018), there was not much happening in the SAFEX lamb carcass market. The price remained flat at R77.00 per kilogramme due to thinly traded volumes.

South African farmers slaughtered 444 425 head of cattle in November 2017, up by 24% from the previous month (October 2017), but down by 17% from the corresponding period the previous year. An update for December 2017 slaughtering activity will be released this week (ending 2 February 2018).

Find the full report here.

Find previous reports here.

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