Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.
Although the focus is on the new production season, some farmers continue to deliver old season maize to commercial silos. Total maize deliveries were reported at 14 937 tonnes in the week ending 3 November 2017, which is 70% lower than the previous week’s (ending 27 October 2017) deliveries. About 65% of this was white maize, with 35% being yellow maize.
South Africa’s 2017/2018 total maize deliveries for week 1 to 27 currently stand at 14.93 million tonnes. Of this total, 60% is white maize with 40% being yellow maize.
The weather forecast shows a possibility of between 20 and 35 millimetres of rainfall across the Western Cape during the next eight days. This could cause harvest delays in areas that have already started with the process.
However, dry and cool conditions should return in the week ending 24 November 2017 and possibly accelerate the harvest process across the Western Cape.
Apart from the aforementioned challenges, the expected rainfall is a welcome development given that the Western Cape’s dam levels are critically low. The most recent update for the week ending 6 November 2017 shows that dams averaged 36%, down by 1% from the previous week and 23% lower than the corresponding period last year.
In areas that planted early in the season, farmers have made notable progress regarding harvest activity. About 54 718 tonnes of wheat was brought to commercial silos in the week ending 3 November 2017. This placed the country’s producer deliveries for week 1 to 5 of the 2017/2018 marketing season at 127 032 tonnes.
The soya bean growing areas of South Africa could receive good showers during the next eight days, which is conducive for the 2017/2018 production season. As previously indicated, South African farmers intend to plant 720 000 hectares of soya bean this season – the largest on record.
In global markets today (9 November 2017), the primary focus is on the United States Department of Agriculture’s (USDA’s) World Agricultural Supply and Demand Estimates report, which is expected to show a lower United States (US) soya bean yield estimate. This follows reports of relatively lower yields in some areas of the Midwest. Last month (October), the agency estimated the US 2017/2018 soya bean production at 121 million tonnes, up by 3% from the previous season.
Soya bean planting in central Brazil is advancing following recent rains with further precipitation expected in the next week. Looking ahead, there are still fears that drier conditions may recur in South America, ahead of a potential La Niña early in 2018.
Brazil’s industry association revised its 2017/2018 soya bean production estimate up by 300 000 tonnes from the previous month to 108.8 million tonnes. This is slightly above the USDA’s estimate of 107.0 million tonnes. Overall, this is 5% lower than the previous season’s harvest.
Yesterday (8 November 2017) the South African potato market lost ground with the price down by 6% from the previous day (7 November 2017), closing at R35.54 per pocket (10kg). These losses were due to large stocks of 874 777 pockets (10kg) at the beginning of the session.
During the session, the market saw a further uptick in deliveries on the back of ongoing harvest activity. This led to a 13% increase in daily stocks to 991 099 pockets (10kg).
The fruit market saw widespread gains in yesterday’s (8 November 2017) trade session due to a combination of factors, such as lower stocks and strong commercial buying, among others. The price of apples was up by 2% from the previous day 7 November 2017), closing at R7.93 per kilogramme. This followed a 31% decline in daily stocks to 190 000 tonnes.
The prices of bananas and oranges were up by 3% and 7% from the previous day, closing at R7.85 and R6.86 per kilogramme, respectively. These gains followed a 37% and 54% decline in stocks of bananas and oranges to 173 000 tonnes and 42 000 tonnes, respectively.