Despite revising the country’s soybean production forecast to 1.23 million tonnes in May, the Crop Estimate Committee has again winched up its forecast to 1.34 million tonnes – making this season’s crop the largest on record - Wandile Sihlobo, Agbiz Economist
Despite revising the country’s soybean production forecast to 1.23 million tonnes in May, the Crop Estimate Committee has again winched up its forecast to 1.34 million tonnes – making this season’s crop the largest on record. This means South Africa could be a net exporter of soybeans this season (albeit being a net importer of soybean oilcake and oil). The exports are expected to reach 30 000 tonnes this season.
The uptick in soybean production is largely driven by an increase in area plantings as well as higher yields. The area planted is estimated at 573 950 hectares, which is 14% higher than the previous season.
South Africa’s soybean production has been on the rise for some time, driven by strong growth in animal feed demand, which in turn, has been spurred on by an increase in demand for high protein food – especially within the growing middle class.
For maize, today’s data could be viewed as a “non-event”. The Crop estimate Committee left the maize production estimate unchanged from the previous month, at 15.63 million tonnes. Given that there is nothing new gained from today’s data, we do not foresee any meaningful reaction in the market in the next trading session. Both white and yellow maize production estimates were left unchanged at 9.47 million tonnes and 6.16 million tonnes, respectively.
On the negative side, sunflower seed production was revised down by 4% from the previous month to 821 970 tonnes. However, this is still 9% higher than the previous season. The decline can be attributed to relatively lower yields, particularly in areas that planted late in the season.
Overall, today’s data confirmed that South Africa will be well supplied in both grain and oilseeds this season. In terms of commodity prices, the current bearish trend could prevail for some time.
Wandile Sihlobo (firstname.lastname@example.org)
Head: Agbiz Economic Intelligence
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