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

Maize:

The expected rainfall across the maize belt in the first few weeks of this month did not materialise. As a result, the planting activity has not progressed much in some areas due to dry conditions. For the eastern regions this is concerning as the optimal planting window narrows, closing at the end of this week (17 November 2017).

Some provinces such as Mpumalanga have already made good progress, with roughly 90% of the area planted at the beginning of this week. The expected rainfall across the maize belt during the next two weeks should improve soil moisture and benefit the new season crop.

The aforementioned weather developments will not cause planting delays in the western regions of the country, where the optimal planting window only closes around mid-December. These are areas that typically produce white maize.

On the global front, at the beginning of this week, about 83% of the maize crop had already been harvested, which is 9% behind the same period last year (12 November 2016). The United States Department of Agriculture (USDA) forecasts the United States (US) 2017/2018 maize production at 370 million tonnes, down by 4% from the previous season due to a decline in hectares planted.

The harvest process is in full swing in Ukraine. About 74% of the crop had already been harvested by 10 November 2017. The country’s 2017/2018 maize crop is estimated at 25 million tonnes, down by 11% year-on-year (y/y).

Wheat:

The forecast rainfall in the Southern Cape and Overberg regions of the Western Cape could slow the winter wheat harvest activity this week (ending 17 November 2017). The process is in full swing across many parts of the country, with disappointing yields in the dryland regions of the Western Cape. The quality of the crop is reportedly fair.

The expected rainfall could slightly improve the province’s dam levels that are critically low, estimated at 36% at the beginning of last week. This is 23% lower than the same period last year (6 November 2016).

On the global front, the US winter wheat planting activity is virtually over, thanks to good weather conditions. On 12 November 2017, about 95% of the US wheat crop had already been planted, which is one percentage point ahead of the corresponding period last year.

At the same time, 84% of the planted crop had already emerged which is one percentage point ahead of the same period last year. The USDA forecasts the US 2017/2018 wheat production at 47 million tonnes, which is 25% lower than the previous season’s harvest and almost in line with the International Grains Council’s estimate.

Soya beans:

Last week’s (ending 10 November 2017) forecasts of rainfall across the soya bean growing areas of the country did not materialise in many areas of the country. However, the near-term weather outlook remains favourable, with prospects of good rainfall during the next two weeks which should improve soil moisture and subsequently benefit the crop.

Planting activity is still at initial stages in many provinces, with roughly 10% of the intended area planted so far in Mpumalanga. In KwaZulu-Natal, roughly 40% of the area has been planted. The other regions or provinces have not made meaningful progress, but that is not of much concern as the soya bean optimal planting window only closes in December

As previously indicated, South Africa’s 2017/2018 soya bean plantings are estimated at 720 000 hectares, which is the largest area on record. The Free State and Mpumalanga account for 83% of the area.

In global markets, the harvest process is heading towards completion in the US. On 12 November 2017, about 93% of the soya bean crop had already been harvested which is 3% behind the corresponding period last year. Overall, there is optimism regarding the US 2017/2018 soya bean production.

The USDA forecasts the country’s 2017/2018 soya bean production at 120 million tonnes, up by 3% from the previous season. This uptick is mainly on the back of an increase in hectares, as well as expected higher yields.

Potatoes:

The South African potato market lost ground in yesterday’s (13 November 2017) trade session with the price down by 5% from the previous day (12 November 2017), closing at R35.57 per pocket (10kg). This was mainly due to large stocks of 1.12 million pockets (10kg) at the start of the trading session.

However, during the session, the market saw strong commercial buying interest, coupled with a decline in deliveries on the back of slow harvest activity over the weekend. This subsequently led to a 22% drop in daily stocks to 871 104 pockets (10kg).

Fruit:

The fruit market started the week on a mixed footing. The price of oranges was significantly up by 43% from the previous day (12 November 2017), closing at R9.45 per kilogramme, due to commercial buying interest and lower producer deliveries. The daily stocks fell by 30% from the previous day to 47 000 tonnes.

The prices of apples and bananas were down by 6% and 16% from the previous day, closing at R7.27 and R6.28 per kilogramme, respectively. This followed a 38% and 24% uptick in daily stocks of apples and bananas to 294 000 tonnes and 246 000 tonnes, respectively.

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