Agbiz Research
25 APRIL 2017
FOR ANY QUERIES, PLEASE CONTACT :
Wandile Sihlobo: [email protected]
|
Tinashe Kapuya: [email protected]
Key Data Releases in Agricultural Markets:

SAGIS weekly grain trade data: 25/04/2017

National Crop Estimates Committee’s monthly data: 25/04/2017

SAGIS weekly producer deliveries data: 26/04/2017

SAGIS monthly data: 26/04/2017

USDA weekly export sales data: 27/04/2017
ECONOMIC INDICATORS
24/04/2017*
25/04/2017*
d-o-d (%∆)
Rand/US Dollar
13,01
13,02
-0,08%
Rand/Euro
14,14
14,15
-0,07%
Euro/US Dollar
1,0864
1,0863
-0,01%
1 270,32
1 273,52
+0,25%
Brent Crude Oil
51,64
51,82
+0,35%
Platinum Spot
956,00
960,50
+0,47%
Dow Jones Industrial Average
20 760,82
20 763,89
+0,01%
JSE All Share
52 734,29
52 921,41
+0,35%
SA repo rate
7,00
7,00
0,00%
SA CPI (%)
6,10
6,10
0,00%
SA CPI – food (%)
8.70
8,70
0,00%
Gold Spot
*Previous day’s prices are from midday (12h00) and today’s ones were captured before 8h00am

The South African Rand gave back some of the gains and traded around R13.02 to the US Dollar this morning,
down 0.08% from the level seen at midday yesterday. The Rand’s depreciation was in line with the US Dollar
appreciation against major currencies. From a data perspective, the SARB will release the February 2017
leading indicator this morning.

The Brent crude oil market gained ground this morning, with the price up by 0.35% from the level seen at
midday yesterday. The support was partly on the back of prospects that OPEC and non-OPEC producers
might extend a supply reduction deal beyond 30 June 2017. At the time of writing, oil price traded around
US$51.82 per barrel.
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MAIZE/CORN
24/04/2017*
25/04/2017*
d-o-d (%∆)
White maize Spot (R/t)
1 852
1 821
-1,67%
White maize Jul 17 (R/t)
1 833
1 805
-1,53%
Yellow maize Spot (R/t)
1 950
1 909
-2,10%
Yellow maize Jul 17 (R/t)
1 947
1 918
-1,49%
CME corn May 17 (US cents/bushel)
358
358
0,00%
*Previous day’s prices are from midday (12h00) and today’s ones were captured before 8h00am

Yesterday’s notable gains in the domestic currency led to widespread losses in the South African maize
market. Moreover, a favourable outlook for the new season crop also added pressure to the market.

Weather forecasts for the next two weeks show a possibility of drier conditions within the South African
maize belt, which is supportive of harvest process. Most areas will probably start with the harvest process
towards the end of May 2017.

This afternoon, the National Crop Estimate Committee (CEC) will release its third production estimates. Last
month, the Committee placed its estimate at 14.3 million tonnes, which is an 83% increase from the
previous season. About 8.5 million tonnes was white maize and 5.8 million tonnes was yellow maize.

Analysts’ survey by Bloomberg and Reuters forecast a 1% decline in South Africa’s 2016/17 maize production
from the previous month estimate to 14.2 million tonnes. This decline will most likely be on white maize
due to persistent dryness across the late planting areas in the past few weeks.

Of minimal impact to the market, but worth noting are reports from Rwanda’s Agriculture Board, which
highlighted that 17% of the maize crop has been damaged by Fall Armyworms. The military is now assisting
in efforts to contain the spread of the pest.

On the global front, this morning Chicago maize price remained unchanged from the level seen at midday
yesterday. Recent data from the USDA showed the US maize export inspections of last week at 1.45 million
tonnes. This is 62% ahead of a corresponding period last year.

Weather forecast for this week shows a possibility of rainfall across the US Midwest, which could possibly
slow planting activity. In the week ending 23 April 2017, US maize farmers had planted 17% of the targeted
area, which is 11% behind the corresponding period last year. The US 2017/18 maize acreage is estimated
at 36.4 million hectares, which is 4% lower than the previous season.

Elsewhere, data from Ukraine’s Agricultural Ministry shows that on the 21st of April 2017, maize plantings
were at 549 000 hectares, which is equivalent to 12% of the targeted acreage for this season.
Bottom line – the domestic maize market could see marginal gains in today’s trade session due to a relatively
weaker Rand against the US Dollar, as well as expectations of a reduction in domestic maize production
estimate.
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WHEAT
24/04/2017*
25/04/2017*
d-o-d (%∆)
SAFEX Wheat Spot (R/t)
4 435
4 420
-0,34%
SAFEX Wheat Dec 17 (R/t)
4 150
4 150
0,00%
404
401
-0,74%
CME Wheat May 17 (US cents/bushel)
*Previous day’s CME prices are from midday (12h00) and today’s ones were captured before 8h00am

South Africa’s wheat spot price was under pressure during yesterday’s trade session, owing to the stronger
Rand against the US Dollar, as well as selling pressure.

Weather forecasts for the next eight days show no signs of meaningful rainfall across the Western Cape
province. The longer term forecasts show a possibility of about 16 millimetres within the next two weeks.
This could potentially slow planting activity.

That said, the planting window remains open until July 2017. Over the past few weeks, the South African
Weather Services suggested that there is a likelihood of above-normal rainfall for late autumn to mid-winter
(June-July-August). If this materialises, it would improve the outlook for the wheat crop.

This afternoon the CEC will release the intentions to plant data for wheat. Bloomberg’s poll of analysts’
forecasts the area at 477 075 hectares in 2017, which is a 6.2% decline from the previous season.

On the global front - this morning, Chicago wheat price was down by 0.74% from the level seen at midday
yesterday, owing to large global supplies of 754 million tonnes – a 2% annual uptick.

Expected rainfall across the US Midwest this week could slow US spring wheat planting. In the week ending
23 April 2017, the US had planted 22% of the targeted area for this season, which is 18% behind the
corresponding period last year. Moreover, winter wheat conditions were rated at 54% good/excellent,
unchanged from the previous week, but 5% low the corresponding period last year.

Elsewhere, drier conditions across France could negatively affect the new season crop. Agritel noted that
rains in the coming weeks are necessary if damage to 2017/18 crops is to be avoided.

In Poland, Sparks Polska forecasts a 2% decline in 2017/18 wheat production to 11 million tonnes. This is
on the back of unfavourable weather conditions in most parts of the country.

Russia’s Agricultural Ministry forecasts the 2017/18 wheat production at 63.7 million tonnes, which is 13%
lower than the previous season due to an expected decline in acreage.

In Argentina, the Buenos Aires Grains Exchange forecasts the 2017/18 wheat production at 17.5 million
tonnes, which is 1.7% annual increase. This is on the back of an expected uptick in area plantings.
Bottom line – the domestic wheat market could see marginal losses in today’s session, owing to a relatively
weaker ZAR/USD exchange, as well as lower Chicago wheat prices.
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SOYBEAN
24/04/2017*
25/04/2017*
d-o-d (%∆)
SAFEX Soybean Spot (R/t)
4 705
4 561
-3,06%
SAFEX Soybean Mar 18 (R/t)
5 160
5 160
0,00%
956
957
+0,10%
CME Soybean May 17 (US cents/bushel)
*Previous day’s CME prices are from midday (12h00) and today’s ones were captured before 8h00am

South Africa’s soybean spot price was under pressure during yesterday’s trade session, due to the stronger
Rand against the US Dollar, as well as positive prospects for this season’s soybean production.

Weather forecast for soybean growing areas shows a possibility of warm and dry conditions this week,
which should accelerate harvest activity. In areas that have already harvested, yields are reportedly above
average, which supports the CEC’s view of a possible record crop of 1.2 million tonnes.

In global markets - this morning Chicago soybean price was up by 0.10% from the level seen at midday
yesterday, owing to fears of expected delays in plantings this week.

In the week ending 23 April 2017, US farmers had planted 6% of the targeted area, well above market
expectations. However, the forecast rainfall across the US Midwest this week could slow soybean planting
processes. Data from the USDA shows that US 2017/18 soybean acreage could expand by 7% to 36.2 million
tonnes. This would be at the expense of maize plantings due to profitability levels.

Moreover, there talks in the market that China could soon make purchases of US soybeans due to relatively
competitive prices than other origins.

Recent data shows that US weekly soybean export inspections for the week ending 20 April 2017 reached
634 877 tonnes, which is 42% higher than the previous week and 15% higher than the volume seen in the
corresponding period last year.

Elsewhere, data from Ukraine’s Agricultural Ministry shows that on the 21 April 2017, soybean plantings
were completed on 55 000 hectares, which is equivalent to 3% of the intended area for the 2017/18 season.
In addition, Ukraine could see delays in plantings this week due to forecast rainfall.

In South America, the weather forecast for the next eight days presents a possibility of light rainfall, which
could possibly cause harvest delays in both Brazil and Argentina. On the 24th of April 2017, Brazil’s soybean
harvest was 94% complete, ahead of the corresponding period last year. At the same time, Argentina’s
soybean harvest was 22% complete, ahead of the same period last year.
Bottom line – The domestic soybeans market could gain ground in today’s trade session due to a relatively
weaker ZAR/USD exchange, as well as higher Chicago soybean prices.
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SUNFLOWER SEED
24/04/2017*
25/04/2017*
d-o-d (%∆)
SAFEX Sunflower seed Spot (R/t)
4 413
4 285
-2,90%
SAFEX Sunflower seed May 18 (R/t)
4 843
4 715
-2,64%
EU (France) sunflower seed (US$/t)
399
396
-0,75%
*Previous day’s CME prices are from midday (12h00) and today’s ones were captured before 8h00am

The South African sunflower market saw widespread losses during yesterday’s session with bearish
sentiment coming from the stronger Rand against the US Dollar, as well as prospects of a good crop.

The CEC will release its third assessment for sunflower seed crop this afternoon. Last month’s estimate was
896 060 tonnes, which is 19% higher than the previous season’s estimate. There could be slight downward
revisions due to persistent dry conditions over the past few weeks around late planting areas of the North
West province. That said, the recent rainfall has led to notable improvements and crops conditions, which
has led to a fair outlook for crops that are at advanced stages of maturation.

In global markets – yesterday the EU’s sunflower seed market lost ground, with the price down by 0.75%
from the previous day, closing at US$396 per tonne, underpinned by large supplies and positive prospects
for the new season crops.

The EU’s 2016/17 sunflower seed production is estimated at 8.6 million tonnes, which is 4% higher than the
previous season. Looking ahead, the 2017/18 sunflower seed production estimated at 9.1 million tonnes,
which is 7% higher than the 2016/17 season.

Meanwhile, the Black Sea sunflower oil market closed in positive territory, with the price up by 0.6% from
the previous day’s level, closing at US$724 per tonne. These gains were largely on the back of strong global
demand for sunflower seed products (oil and meal). Data from UkrAgroConsult shows that in the first 20
days of April 2017, Ukraine’s sunflower oil and meal exports reached 226 000 tonnes and 137 100 tonnes,
respectively.

Moreover, plantings for the 2017/18 season are underway across the Black Sea region. Data from Ukraine’s
Agricultural Ministry shows that on the 21st April 2017, sunflower seed plantings were completed on 1.6
million hectares, which is equivalent to 29% of the intended area.

Weather forecast for the Black Sea region shows a possibility of rainfall across the eastern part of Ukraine
and southern parts of Russia, which could cause planting delays.
Bottom line – the domestic sunflower seed market could see marginal gains in today’s trade session, owing
to a relatively weaker ZAR/USD exchange.
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FRUIT (South Africa)
24/04/2017
25/04/2017*
d-o-d (%∆)
Apples (R/kg)
6,95
7,30
+5,04%
Bananas (R/kg)
8,56
8,20
-4,21%
Oranges (R/kg)
3,13
3,39
+8,31%
*Previous trading day’s price survey in Johannesburg fresh produce market

Yesterday the Johannesburg Fresh Produce Market ended the day mixed. The apple price was up by 5%
from the previous day, largely supported by strong buying interest. However, these gains could be short
lived due to large supplies of 267 568 tonnes.

The bananas market lost 4% from the previous day, closing at R8.20 per kilogramme. This was on the back
of large stock levels to 109 488 tonnes.

Lastly, the oranges market gained 8% from the previous day, closing at R3.39 per kilogramme, supported
by strong buying interest. That said, this could be short lived due to large stocks levels of 315 725 tonnes
(compared to 297 621 tonnes the previous day).
Bottom line – The volumes (to be delivered) and buying interest are likely to be the key drivers/determinants
of the price movements in the South African fruit market this week.
BEEF CARCASS
SAFEX Beef June 2017 (R/kg)
24/04/2017*
25/04/2017*
d-o-d (%∆)
46,00
46,00
0,00%
*Previous day’s CME prices are from midday (12h00) and today’s ones were captured before 8h00am

The SAFEX beef market had a quiet start of the week, with the price unchanged from the previous day’s
levels, closing at R46.00 per kilogramme. This was on the back of reduced activity at the stock exchange.

With that said, the market sentiment remains bullish due to easing slaughter activity, as farmers continue
to restock their herds (after a drought spell). The most recent data from the Red Meat Levy Admin shows
that in February 2017, South African farmers slaughtered 192 186 head of cattle, which is 7% lower than
the previous month and 17% lower than the same period last year.
Bottom line – The movements of the SAFEX beef price will mostly depend on the volumes traded at the
stock exchange. Therefore, it is worth noting that these prices could differ from the physical market due to
limited participation (in the stock exchange).
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POTATOES
24/04/2017
25/04/2017*
d-o-d (%∆)
29,51
27,92
-5,39%
RSA Potatoes (R/10kg)
*Previous day’s price survey across RSA fresh produce markets

The South African potatoes market lost ground during yesterday’s trade session, with bearish pressure
coming from higher stock levels. At the start of the session, the stocks were at 1 076 185 bags (10 kg bags),
which is 21% higher than the previous trading day.

However, during the session, there was a decline in deliveries due to slow harvest activity, following a
weekend. This led to a 31% decrease in daily stock levels 743 936 bags (10 kg bags).
Bottom line – With stocks still at relatively lower levels of 743 936 bags (10 kg bags), the potatoes market
could gain ground in today’s trade session.
WEATHER FORECAST: South Africa

The weather forecast for this week shows a possibility of dry and warm conditions across central and
northern parts of South Africa (figure 1). This is with the exception of the western parts of the Western Cape
and Northern Cape provinces which could receive light showers of 16 millimetres. In addition, eastern parts
of Limpopo province could also receive light showers. This will have minimal impact on summer crops but
will be beneficial for winter crop growing areas, ahead of the planting period.

The long-term weather forecast shows a possibility of drier conditions across the country. This is with the
exception of the Western Cape province which could possibly receive light showers of roughly 10
millimetres (figure 2).
Figure 1: Next 8-days precipitation forecast
Source: wxmaps
Figure 2: Next 16-days precipitation forecast
Source: wxmaps
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Figure 3: Precipitation forecast
Source: wxmaps

Key Data Sources: JSE, CME, Potatoes SA, Johannesburg Fresh Produce Market, Red Meat Abattoir Association, Reuters,
SAGIS, USDA, International Grains Council, National Crop Estimate Committee, Earth Institute: Columbia University,
South African Weather Services, Sunseedman, and wxmaps.
@WandileSihlobo @TinasheKapuya @AgriChamber
Disclaimer:
Everything has been done to ensure the accuracy of this information, however, Agbiz takes no responsibility for any losses
or damage incurred due to the usage of this information.
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