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

Maize:

Weather forecasts for the next eight days show a possibility of warm and dry conditions, which should allow for an uninterrupted harvest window. However, the last week of the month could present widespread showers which could stall the harvest process, but benefit the late planting areas in the western parts of the country. In addition, dam levels could also see improvement from the expected showers and benefit the irrigation areas over the coming months.

From a trade perspective, although South Africa is set to regain its status as a net exporter of maize in 2017/2018 marketing year, the country remains a net importer of maize in the 2016/2017 marketing year, which ends next week, 30 April 2017. This week, however, there were no imports. The last imports were during the week ending 31 March 2017, coming in at 42 216 tonnes. Overall, South Africa’s 2016/2017 total maize imports stand at 2.27 million tonnes, which is 99% of the seasonal import forecast.

In the same week, South Africa exported 13 084 tonnes of maize to regional markets (Africa), with a 74% share being white maize and 26% being yellow maize. South Africa’s 2016/2017 total maize exports currently stand at 785 638 tonnes (64% is white maize and 36% is yellow maize).

Looking ahead, South Africa’s 2017/2018 total maize exports are estimated at 2.7 million tonnes. About 52% of this is set to be white maize and 48% to be yellow maize. This comes on the back of an expected rebound in domestic production.

Wheat:

Weather forecasts for the next eight days show a possibility of dry and warm conditions, which is not ideal for plantings. The dam levels are critically low, which puts the irrigation areas at a disadvantaged position. Data from the Department of Water and Sanitation shows that in the week ending 17 April 2017, the Western Cape average dam levels were at 22% full, which is 7% lower than the same period last year.

With that said, weather forecasts for the last week of this month promises widespread light showers across the winter wheat growing areas. If this materialises, soil moisture could improve ahead of the planting period.

In the week ending 14 April 2017, South Africa imported 30 654 tonnes of wheat. About 52% came from Germany and 48% from the Czech Republic.  This brought the country’s 2016/2017 total wheat imports to 426 271 tonnes, which is 28% of the seasonal import forecast (1.5 million tonnes).

On the global front, this morning (20 April 2017) the Chicago wheat price was down by 0.48% from the previous day’s level due to improving weather conditions in the United States (US).

Weather forecasts across the US present a possibility of warm conditions towards the end of this month, which could be favourable for spring wheat plantings. At the start of this week, the US had planted 13% of the targeted area, which is 12% behind the corresponding period last year.

Soya bean:

Weather conditions for the next eight days present a dry and warm outlook, which is ideal for harvest activity.  However, the last week of the month could bring rainfall and that might stall harvest activity.

Next week, on 25 April 2016, the National Crop Estimate Committee will release its updated production estimates. Crop conditions have remained favourable since last month’s estimate and the yields in areas that have started harvesting are reportedly above average. As a result, we believe that the committee will maintain its estimate for South Africa’s 2016/2017 soya bean production at 1.2 million tonnes, a record level.

In global markets, this morning (20 April 2017), the Chicago soya bean price was down by 0.21% from the level seen at midday yesterday (19 April 2017), owing to prospects of favourable weather conditions in the US.

Weather forecasters are anticipating drier and warm conditions across the US Midwest towards the end of April and start of May, which should allow farmers to make better progress with fieldwork. US 2017/2018 soya bean acreage is estimated at 36.2 million hectares, a 7% annual increase.

RSA Potatoes:

Yesterday (19 April 2017), the South African potato market saw additional gains and closed in positive territory, with support coming from lower stock levels. At the start of the session, the stocks were at 588 255 kg (10 kg bags), which is 25% lower than the previous trading day.

However, during the session, there was an uptick in deliveries on the back of increasing harvest activity, as people return from the long weekend. This led to a 25% recovery in daily stock levels 733 736 kg (10 kg bags).

RSA Fruit:

Yesterday (19 April 2017), the Johannesburg Fresh Produce Market ended the day on a mixed note. The apple market lost ground, with the price down by 11% from the previous day (18 April 2017). This was due to a 31% uptick in stock levels to 311 919 tonnes.

The banana market lost 3% from the previous day, closing at R8.21 per kilogramme, due to relatively higher stock levels of 306 756 tonnes (compared to 187 178 tonnes on 17 April 2017).

Meanwhile, the oranges market gained 3% from the previous day, closing at R3.18 per kilogramme, owing to strong buying interest and relatively lower stock levels of 317 595 tonnes. This is 14% lower than the previous day’s stocks.

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