Although the prospects for South Africa’s 2016/17 maize production are positive, some areas that planted late are still in need of rainfall, particularly the western parts of the North West province. Fortunately, the weather forecast shows a possibility of widespread rainfall this week, which could be beneficial for the crop.
On the global front – this morning Chicago maize price were down by 0.55% from the level seen at midday Friday, owing to expected large supplies. The USDA will release its monthly supply and demand estimates data tomorrow. Last month’s updates placed the global maize crop at just over one billion tonnes.
Elsewhere, reports from the Mexican Minister of Economy highlights that the country is considering importing duty-free maize from Brazil and Argentina. This will be significant move given that Mexico traditionally imports maize from the US. In fact, the US constitutes an average 97% of Mexico’s annual maize imports.
In South America, weather forecasts remain favourable for the maize crop in both Argentina and Brazil. Argentina’s 2016/17 maize production is estimated at 43 million tonnes, which is 7% higher than the previous season. Brazil’s 2016/17 maize production is estimated at 89 million tonnes, a 33% annual increase.
Farmers in parts of the Western Cape province will soon start preparing fields for the 2017/18 winter wheat crop. The short term weather forecast favours this activity, it presents a possibility of rainfall across the winter wheat growing areas. In addition, the South African Weather Services suggests that there is a likelihood of above-normal rainfall from June to August 2017, which will be positive for the new season crop .
On the global front – this morning Chicago wheat price was up by 0.24% from the level seen at midday Friday, due to strong global demand. Last week, the US weekly wheat exports reached 568 400 tonnes, which is well above market expectations of 450 000 tonnes.
On the production front, recent data from Informa Economics suggests that US 2017 winter wheat production could reach 35 million tonnes, which is 23% annual decline.
On the demand front, Algeria recently bought 570 000 tonnes wheat from the world market, with the majority from France. India bought 150 000 tonnes of wheat from Australia. Indonesia bought 60 000 tonnes of wheat from Ukraine.
Some areas on the eastern side of South Africa have started harvesting soybean crop. Therefore, the forecast rainfall this week could cause harvest delays. Meanwhile, the late plantings areas could still benefit from rainfall. Overall, the crop is still in good condition across the country, which supports the National Crop Estimate Committee’s view of a possible record crop of 1.2 million tonnes.
In global markets – this morning Chicago soybean price was up by 0.75% from the level seen at midday Friday, owing to wet weather conditions in Argentina, as well as firm global soybean demand. Last week, the US soybean weekly export sales reached 482 000 tonnes, towards the upper band of market expectations. At the same time, soy oil exports reached 22 400 tonnes.
Elsewhere, China’s National Grain and Oils Information Centre has revised up the country’s 2016/17 soybean import estimate by 1.5 million tonnes to 86.5 million tonnes. This is 4% higher than the previous season.
Most sunflower seed growing areas of the country remain fairly dry. The highest rainfall received this month was in Ventersdorp, Klerksdorp and Sannieshof, estimated at 25, 52 and 24 millimetres, respectively. While the early plantings crops are in good condition, with dry weather conditions supporting the maturing process, the late plantings still need rainfall. The current weather forecasts show a possibility of rainfall across the country within the next eight days, which could benefit the late planted crops.
In global markets – on Friday, the EU’s sunflower seed market lost ground, with the price down by 0.25% from the previous day, closing at US$394 per tonne. These losses were generally on the back of large supplies, as well as positive prospects for the 2017/18 EU’s sunflower seed crop.
The EU’s 2016/17 sunflower seed is estimated at 8.6 million tonnes, which is 4% higher than the previous season. Moreover, the next season promises larger increases, with the 2017/18 sunflower seed production at 9.1 million tonnes, which is 7% higher than the 2016/17 season.
The Johannesburg Fresh Produce Market saw widespread gains during Friday’s trade session owing to relatively lower stock levels and strong buying interest. The apple price was up by 3% from the previous day, with support coming from a 1% decline in stock levels to 230 430 tonnes.
The bananas market also gained ground and closed in positive territory, following a 2% decline in stock levels to 140 893 tonnes. The oranges price gained 4% from the previous day, closing at R2.98 per kilogramme from the previous day, following a 35% decline in stock levels to 190 089 tonnes.
On Friday, the South African potatoes market closed in negative territory due to large stock levels of 1 131 024 bags (10 kg bags) at the start of the session. Moreover, during the session, the market saw strong buying interest, which was later offset by an increase in deliveries on the back of an ongoing harvest activity. Overall, the stocks fell by 0.03% from the previous day, closing at 1 130 727 bags (10 kg bags).
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