FOOD-FOR-THOUGHT WEEKLY - 12 February 2021 - Rand Agri
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12 February 2021
WEEKLY
FOOD-FOR-THOUGHT
Weather
- South African weather forecast
- International weather forecast
Parities
- Import and export parities for yellow maize
FOOD-FOR-THOUGHT International Agriculture
- South American crop conditions
CONTENTS - Agricultural News: February WASDE Report
- Agricultural News: Ending stocks to exports
Local Agriculture
- Imports and exports
- Producer deliveries
- Agricultural News: Dam levels
Currencies
- Overview - USD/ZAR
LOCAL
WEATHER 14-day weather forecast
According to the weather bureau, rainfall is forecast for parts of Mpumalanga and
Limpopo due to the presence of tropical low pressure systems near Mozambique.
Warmer, sunny weather is expected over the western parts of the country in the coming
week.
USA Drought Monitor
9 February 2021 11 February 2020
Weather conditions in the US are still very dry in the
central to western areas moving towards the mid-west.
These dry conditions will only have an effect on prices as
soon as the US starts to plant. Keep in mind that this
monitor changes weekly
Follow the link to stay up to date with the latest drought
conditions in North America:
https://droughtmonitor.unl.edu/CurrentMap.aspx
INTERNATIONAL
WEATHER
10-day weather forecast: South America
More a rainfall is expected in Mato Grasso and
central parts of Brazil, currently still favouring
developing crops.
Argentina’s main producing areas can expect below
normal rainfall.
INTERNATIONAL WEATHER Extremely low temperatures are expected over the central parts of the US. The average snowfall must be monitored, as it is the most important factor determining soil moisture.
INTERNATIONAL WEATHER
IMPORT & EXPORT
PARITIES
Mar’21 May’21 Jul'21 Sept'21
PMB import parity R 4 370 R 4 221 R 4 505 R 4 183
CPT export parity R 4 200 R 4 018 R 4 229 R 3 897
SAFEX yellow maize R 3 453 R 3 260 R 3 187 R 3 247
DBN export parity R 3 211 R 3 260 R 3 187 R 3142
SOUTH AMERICA
AGRICULTURE
South American crop conditions as at 5 February 2021
Maize Soybeans
9% 9%
24% 19%
Good to excellent Good to excellent
Average Average
Poor Poor
67%
72%
3%
0%
10%
22% 38% 35%
18% 17%
59%
65%
68% 2019/20
2019/20
65%
Previous Week
Previous Week
Crop conditions improved over the past week due to
favourable weather conditions
BRAZIL
AGRICULTURE
11,2 % of
It is
soybeans
33,31%
in Mato
below the
Grosso
2019/20
have been
pace.
harvested
INTERNATIONAL
AGRICULTURE
February ’21 WASDE
SOYBEANS
MAIZE
WHEAT
US ending stock: US ending stock: US Ending stock:
January – 1 552 billion bushels January – 0,140 billion bushels January – 0.836 billion bushels
Expectation 1 384 billion bushels Expectation 0,123 billion bushels Expectation 0.834 billion
bushels
February – 1 502 billion bushels February – 0,120 billion bushels
February – 0.836 billion bushels
World ending stock: ➢ World ending stock: ➢ World Ending stock:
Volwasse stadium
January – 283.83 million ton January – 84.31 million ton January – 313.19 million ton
- Expectation 279.79 million ton Expectation 83.30 million ton Expectation 312.86 million ton
February – 286.53 million ton February – 83.36 million ton February – 304.22 million ton
The adjustments were considerably less than expected and prices came
under pressure after the USDA’s publication.INTERNATIONAL
AGRICULTURE
February ’21 WASDE
US Ending stocks for Corn US Ending stocks for Soybeans
Volwasse stadium
-
The USDA adjustment of maize resulted in the lowest carryover stock in seven years. The current South American soybean harvest can add support to the stock levels in the
(Source: @karenbraun *twitter) coming weeks.INTERNATIONAL
AGRICULTURE
US Ending Stocks to Exports
Volwasse stadium
-
Source: https://twitter.com/KevinVanTrumpINTERNATIONAL
AGRICULTURE
Chinese imports far from slowing down!
China is one the world’s largest importers
of maize and soybeans and this shopping
spree is far from over, according to Cargill
CEO, Dave MacLerman.
China’s local pork herd, which is growing at
an exponential pace, is one of the main
factors contributing to these high levels of
buying in recent months.
According to market analysts, roughly
Volwasse stadium 20 million tons of imports are needed to
meet the feed demand and to build
- stockpiles as a way to ensure food security.
*Read More:
https://www.google.co.za/amp/s/www.bloomberg.com/
amp/news/articles/2021-02-05/world-s-top-crop-trader-
says-chinese-buying-spree-has-more-to-goLOCAL EXPORTS 2020/21
AGRICULTURE
Destination for most exports:
• Exports week ending 5 February: 20 962 t
WMAZ exports:
White Maize •
•
Previous week: 25 940 t
Imports: 0 t 11 128 t
• Export intentions: 151 861 t Zimbabwe
(Next 8 weeks)
• Exports week ending 5 February: 8 722 t
• Previous week: 10 771 t YMAZ exports:
Yellow Maize • Imports: 0 t 2 941 t
• Export intentions: 63 562 t Zimbabwe
(Next 8 weeks)LOCAL
AGRICULTURE
Cumulative local deliveries up to 5 February 2021
White maize Soybeans
Week ending 5 February: 5 870 t Week ending 5 February: 738 t
Previous week: 10 071 t Previous week : 839 t
Total: 8 110 510 t (92,1%) Total: 1 215 503 t (96,4%)
Yellow maize Sunflower
Week ending 5 February: 2 679 t Week ending 5 February: 57 t
Previous week: 10 802 t Previous week: 239 t
Total: 6 079 132 t (91,8%) Total: 786 022 t (100%)Production forecast
2021
FINAL FINAL CROP CEC CEC FINAL CROP
AREA PLANTED 2020 AREA PLANTED FINAL ESTIMATE1) vs
CROP
2020 TONS NOV 2020 NOV 2020 FINAL ESTIMATE
HA HA TONS %
(A) (B) (C) (D) (B) ÷ (D)
White Maize 1 616 300 8 547 500 1 616 300 8 666 310 -1,37
Yellow Maize 994 500 6 752 500 994 500 6 741 870 +0,16
Total Maize 2 610 800 15 300 000 2 610 800 15 408 180 -0,70
Sunflower seed 500 300 788 500 500 300 785 910 0,33
Soybeans 705 000 1 245 500 705 000 1 245 500 -
Groundnuts 37 500 50 080 37 500 50 080 -
Sorghum 42 500 158 000 42 500 155 560 +1,57
Resource: SAGISLOCAL
AGRICULTURE
Dam Levels: 9 February 2021
Vaal Dam Bloemhof Dam
Percentage: Percentage:
101,5% 108,4%
Previous week: Sterkfontein Dam Gariep Dam Grootdraai Dam Previous week:
79,8% 108,1%
Previous year: Percentage: Percentage: Percentage: Previous year:
56,9% 96,9% 112,9% 104,2% 73,2%
Previous week: Previous week: Previous week:
96,6% 120,5% 108,4%
Previous year: Previous year: Previous year:
92,0% 70,9% 100,9%EXCHANGE RATE
R/$
The South African rand has strengthened
further over the past week.
The currency received good support after the
business confidence index for January 2021
increased from 93,4 to 94,5.
The dollar lost momentum against other
major currencies in the first 5 weeks of the
year due to high fiscal spending and a 1,9
trillion-dollar COVID relief bill.
USDZAR Trades Lower As SA Business Confidence Index
Improves; Targets 14.54 (investingcube.com)
Current resistance: 15,40
Current support: 14,50Market overview: Maize
Previous season:
• With the exception of early deliveries, there is almost no • South Africa is currently pricing for exports
yellow maize carryover stock. In addition, two vessels from May to August. This only allows for
with YM (yellow maize) for export in April / early May has 1,7 million ton of exports. To be able to
been booked, which should support previous-season YM export the necessary volumes, South
prices. Africa will have to continue exporting until
• The 1 042 million ton of WM carryover stock (white October and maybe even later, depending
maize) is sufficient. The availability of white maize might
nevertheless pose problems, since it is concentrated in a
on the yield. Brazil and Argentina are
currently cheaper than South Africa for the
RAND AGRI
same period, hence there is a downward
•
number of western silos.
Internationally, US CBOT prices drastically increased from
December. This was due to a number of circumstances. •
risk of $20 on the SAFEX market.
The exchange rate is yet another factor
Trader Snapshot
Argentina temporarily closed its borders for maize that will affect the price of maize. If
exports, the USA adjusted their previous season yields president Biden’s US stimulus package
downward and there were unexpectedly large exports succeeds, the rand might strengthen
from the USA to China. further against the dollar, but on the other
hand, CBOT prices will increase as a result
New season: of a weakening dollar.
• Internationally, the market should find support thanks to
lower world carryover stock levels. The question is Summary
whether China will continue its current large imports from Production for the current season is above
the USA or whether they will produce more grain locally. average and prices are good. My view is that
• The current La Nina system that brought good rains to farmers should be able to hedge 40-50% of their
South Africa, is expected to cause dryer conditions in the expected production at current levels. Options
USA. Soil moisture levels in the UA are currently much also present a good opportunity to further
lower than during the previous season, with the planting exploit the upward potential of the market whilst
season imminent. covering downward price risks.
• Planting season in the USA starts in March and we will
have to keep a close eye on its progress. Any movements Planting progress in the USA should be closely
towards more soybean plantings at the expense of maize, monitored so that any possible marketing
or drought, should support CBOT maize prices. opportunities can be taken advantage of, to
• The production potential appears to be above average, market a further 25% of the expected
and my expectation is a production of around 16,5 million production. SAFEX currently does not sufficiently
ton. This implies that 2 million ton of deep sea exports will cover the spread to enable profitable storage of
be required to keep the South African balance sheet in the production, so it makes financial sense to
equilibrium. market either before or during the harvest.
Overview compiled by: Ampie Rossouw – Rand Agri Grain Trader.• Chinese record imports continue.
• Dam Levels: Many of the country’s important
dams, including the Vaal Dam, are currently
at full capacity after very good rains over the
SUMMARY catchment areas.
• The South African rand traded stronger
against the dollar due to optimism about
emerging markets.CONTACT US
Tel: +27 (0) 13 243 1166
E-mail: info@randagri.co.za
Web: www.randagri.co.za
Address: 24 Samora Machel Street
Middelburg, MpumalangaYou can also read
