Wandile Sihlobo, Agbiz

The weather remains an important factor in the United States (US) maize market, as it could still influence the harvest process, as well as the crop quality/conditions. The forecast for the next two weeks indicates prospects of rainfall over the eastern parts of the Midwest, while other areas are expected to experience cool and drier weather conditions. Therefore, the potential delays in the harvest process will not be widespread but concentrated on a few patches.

As a result, next week’s (ending 26 October 2018) harvest pace assessment could show a bit of an uptick from levels observed in the week ending 12 October 2018, where 39% of the US maize crop had already been harvested. This is good progress; about 12% ahead of the corresponding period last year (2017).

The crop conditions assessment could show similar results to the week ending 12 October 2018, where 68% of the US maize crop was rated good or excellent. This was about 3 percentage points better than the corresponding period last year.

We place more emphasis on the US because of its importance in global maize supplies. The US 2018/2019 maize production is estimated at 375 million tons, up by a percentage point from the previous week. This accounts for 35% of the expected 2018/2019 global maize production.

In the domestic maize market the weather is also a key focus as the 2018/2019 planting season has recently started. The past couple of days brought widespread rainfall in the eastern and central parts of South Africa, which bodes well for the new season crop. The outlook for the next eight days promises additional showers over the eastern parts of the country which will lead to further improvement. The elephant in the room, however, is the forecast El Niño, which might negatively affect crop conditions later in the season. – Wandile Sihlobo

Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.

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