Wandile Sihlobo, Agbiz

Harvest activity is gaining momentum in the irrigation areas around the country. This is reflected in the volumes of maize delivered to commercial silos in the week ending 18 May 2018, which amounted to 144 563 tons, up by 14% from the previous week (ending 11 may 2018). About 56% of this was yellow maize, with 44% being white maize. The total maize deliveries for the first three weeks of the 2018/2019 marketing year are estimated at 305 167 tons. More maize will be delivered in the coming weeks.

Harvest activity is still at initial stages in the dryland areas but could gain momentum during the next two weeks as the weather forecast shows a possibility of drier conditions over the South African maize belt. To reiterate a point made in yesterday’s (23 May 2018) note, our conversations with farmers suggest that the crop yields in most regions could vary between average and above average, which supports the National Crop Estimates Committee’s view of a good harvest of 12.8 million tons. The committee will release an update of the production estimate on Tuesday, 29 May 2018.

On the data front,  monthly figures from SAGIS will be available tomorrow (25 May 2018), which will present an update on stock levels, as well as monthly maize consumption data. South Africa’s maize ending stock was recorded at 4.6 million tons in March 2018, treble the volume seen in the same period last year (2017). April 2018 data could show a slight decline due to solid domestic consumption. The recent uptick in deliveries will be reflected in the May 2018 data, as it started to peak in the past two weeks or so.

Overall, the theme remains unchanged, despite the abovementioned monthly developments. South Africa could have large maize supplies in the 2018/2019 marketing year, estimated at 16.4 million tons. This is well above the annual consumption of 10.7 million tons. All things considered, the SAFEX maize prices could remain at relatively lower levels for some time.  – Wandile Sihlobo, Agbiz

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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