FOOD-FOR-THOUGHT WEEKLY - 5 February 2021 - Rand Agri
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5 February 2021
WEEKLY
FOOD-FOR-THOUGHT
Weather
- South African weather forecast
- International weather forecast
Parities
- Import and export parities for yellow maize
International Agriculture
FOOD-FOR-THOUGHT - South American crop conditions
CONTENTS - Agricultural News: USA Exports
- Agricultural News: Production statistics for top producing
countries
Local Agriculture
- Imports and exports
- Producer deliveries
- Agricultural news: Areas planted
- Agricultural news: Market overview of soybeans
Currencies
- Overview - USD/ZAR
LOCAL
WEATHER 14-day weather forecast
Continuous rainfall is forecasted across most of the country for the coming days.
The weather forecast indicates dryer conditions from Tuesday onward.
USA Drought Monitor
2 February 2021 4 February 2020
Current weather in the US is 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
See the comparison against the same time last year.
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
Above-normal rainfall is forecasted 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
IMPORT & EXPORT
PARITIES
Mar’21 May’21 Jul'21 Sept'21
PMB import parity R 4 301 R4 233 R 4 418 R 4 087
CPT export parity R 4 130 R 4 031 R 4 144 R 3 848
SAFEX yellow maize R 3 403 R 3 331 R 3 283 R 3 343
DBN export parity R 3 372 R 3 331 R 3 283 R 3 275
ARGENTINA
Agriculture
South American crop conditions up to 28 January 2021
Maize Soybeans
10%
22% 13% 18%
Good to excellent Good to excellent
Average Average
Poor Poor
68%
69%
2%
10%
8% 21%
39%
28%
19% 18%
59%
69%
64% 2019/20
2019/20
63%
Previous Week
Previous Week
Crop conditions deteriorated since the previous
week due to heavy rainfall in production areas.
INTERNATIONAL
AGRICULTURE
Record USA exports for 2020/21
Volwasse stadium
-
On 28 January 2021, the On 29 January 2021, the
26 January 2021 the 18th
USDA confirmed 1,7 million USDA announced an
largest quantity of maize
t of maize exports to China. additional 2 108000 t of
ever exported from the
The total exports for the exports to China. This is the
USA, 1 360 000 t was
amounted to more than 3 second largest quantity
booked.
million tons. since April 1977.
INTERNATIONAL
AGRICULTURE
Statistics for top producing countries
Volwasse stadium
-
Source: https://twitter.com/KevinVanTrump
LOCAL EXPORTS 2020/21
AGRICULTURE
Destination for most exports:
• Exports week ending 29 January: 25 940 t
WMAZ exports:
White Maize •
•
Previous week: 25 604 t
Imports: 0 t Zimbabwe 12992 t
• Export intentions: 180 930 t
(Next 8 weeks)
• Exports week ending 29 January: 10 771 t
• Previous week: 10 455 t YMAZ exports:
Yellow Maize • Imports: 0 t Zimbabwe 5 006 t
• Export intentions: 65 522 t
(Next 8 Weeks)LOCAL
AGRICULTURE
Cumulative local deliveries up to 29 January 2021
White maize Soybeans
Week ending 29 January: 10 071 t Week ending 29 January: 839 t
Previous week: 7 152 t Previous week : 1 407 t
Total: 8 094 508 t (92,0%) Total: 1 214 618 t (96,3%)
Yellow maize Sunflower
Week ending 29 January: 10 802 t Week ending 29 January: 239 t
Previous week: 6 661 t Previous week: 233 t
Total: 6 067 480 t (91,6%) Total: 784 869 t (99,9%)LOCAL
AGRICULTURE
2021 area planted compared to the last seven years
Yellow maize/Geelmielies White maize/Witmielies
1 643 100 1 701 500
1 204 800
1 050 750 1 075 000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sunflower/Sonneblom Soybean/Sojabone
787 200 806 000
504 700 473 300
2013 2014 2015 2016 2017 2018 2019 2020 2021 2013 2014 2015 2016 2017 2018 2019 2020 2021LOCAL
AGRICULTURE
2021 area planted compared to 2020 yields
INTERESTING
If the current crop delivers the same yield as in 2020 and we use the latest hectares planted:
White maize Yellow maize Soybeans Sunflower
2019/20 yield: 5,36 t/ha 2019/20 yield: 6,78 t/ha 2019/20 yield: 1,77 t/ha 2019/20 yield: 1.57 t/ha
2020/21 area planted: 2020/21 area planted: 2020/21 area planted: 2020/21 Area Planted:
1 701 500 ha 1 075 000 ha 806 000 ha 473 300 ha
Production: 9,12 m ton Production: 7,29 m ton Production: 1,43 m ton Production: 743 496 tonLOCAL
AGRICULTURE
Market Overview: Soybean
According to the most recent SASDE Report (South Africa Supply & Demand Estimates), the
local market can expect a shortage of oilseeds. The commodity traded much stronger over the
SOYBEANS BALANCE
SOYBEAN BALANCE SHEET
SHEET past few weeks projecting a bullish sentiment for oilseeds in 2020/21.
SAFEX prices for soybean for the February contract had an inverse of approximately R1 200
2019/20 2020/21 compared to the March contract earlier this week. The January contract also saw an inverse of
around R1 000 against February and it not enough stock come to the market.
Read more about the most recent SASDE: http://www.namc.co.za/wp-
Supply 1 646 518 1 469 955 content/uploads/2021/01/NAMC-SASDE-Jan-report21.pdf
Soybean stock vs consumption
Demand 1 508 063 1 376 100 600000
500000
Ending Stock 138 455 93 855 400000
300000
113708 83796
200000
HOW MANY 93855
63704
DAYS’ 34 25 100000
STOCK? 0
2020/21 2019/20 2018/19 2017/18 2016/17 2015/16 2014/15 2014/13
Voorraad Verbruik per maandEXCHANGE RATE
R/$
The South African rand strengthened considerably
against the US dollar in the first week of February
2021.
This comes after South Africa received their first
COVID-19 vaccines, which gave market players a
greater appetite for emerging markets.
On Monday night President Cyril Ramaphosa eased
the lockdown restrictions for South Africa, which
also contributed to a stronger rand later in the
week. Analysts expect further strengthening to
around the R14,73 level over the coming weeks.
Read more:https://www.dailyforex.com/forex-
technical-analysis/2021/02/usdzar-volatility-
signals-possible-bearish-resumption/157687
Current Resistance: 15,02
Current Support: 14,88
High outlook: 15,14
Low outlook: 14,74A snapshot of the international and local soybean situation:
• The current world and South African soybean picture is one that needs to be looked
at by producers and processors on a regular basis in this fast-changing world.
• Internationally, there is still a bullish sentiment towards soybean.
• The rising soy prices internationally is due to greater demand from the biggest buyer
in the world namely, China.
• The Chinese pig industry is a hungry industry and is bouncing back from a swine flu
infection. The feed demand will grow with the pig herd and so will the soybean meal
demand, if no new infections surface again.
RAND AGRI
• Another contributing factor that drives the price up is the current weather
conditions in the USA. It is drier than normal in the summer crop regions which
offers a bleak outlook for ample profits on grain.
Trader Snapshot
• Depleted stock levels cause near month prices to be higher than deferred prices,
normally also leading to price increases in the longer term.
• To summarise the international outlook, we as Rand Agri stay of the opinion that
prices could rally further internationally.
• The local soybean situation is in line with the international sentiment.
• In South Africa the planting conditions and prices were favourable for the production
of soybean for the 2020/2021 season.
• Producers did not hold back and 806 000 ha was planted by the end of 2020.
• The weather conditions were favourable and as of now most of the soybean in field
has very good yield potential.
• The demand for soybean meal (mainly feed for the chicken industry in SA) was
strong throughout the lockdown and most of 2020.
• Crushers (processors) seem to make a fair amount of money and will probably be
processing soybean at full capacity throughout 2021.
• Local supply and demand is currently in equilibrium and could go either way with the
importing or exporting of a shipload.
• In summary we have to recognise the global demand for soybean and South Africa
will probably follow suit with higher prices in the long term.
• The exchange rate will play a role in the local market and a close eye will have to be
kept on the rand.
• At current prices we are of the opinion that 20-30% of long-term yield can be priced
by farmers.
Overview compiled by: Johan Gouws – Rand Agri Oilseed Trader.• USA records record daily exports.
• RSA - area planted in 2021 showed an
increase in maize and soybean.
SUMMARY • Sunflower area planted lowest in 10 years.
• 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
