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Reflections on South America's soy and maize planting progress and implications for South Africa
We have been closely watching South America's maize and soybean planting progress, and the 2024-25 season seems to have started nicely. We are experiencing a La Niña weather phenomenon, which typically leads to drier weather conditions in South America (the opposite of the Southern Africa experience).
But so far, the season seems to have started on sound footing in South America with encouraging maize and soybean planting progress. The La Niña has not had a significant impact, and various regions of the countries have received favourable rainfall that supports the planting process.
Brazil and Argentina are essential contributors to global grains and oilseed production. These two countries collectively account for 14% and 50% of global maize and soybean production.
The optimistic 2024-25 global maize and soybean production estimates from the International Grains Council and the U.S. Department of Agriculture have assumed a decent harvest from Brazil and Argentina.
So, if La Niña changes and has a harsher impact on the crop in the coming months, depending on the scale, there would be a notable impact on the global harvest.
A La Niña weather event in South Africa typically brings above-normal rainfall and supports agricultural production. Therefore, we view the 2024-25 season as a period of possible recovery following a harsh season where South Africa's 2023-24 summer grains and oilseed harvest fell by 23% year-on-year.
Because of the scale of production in the region, South American crop conditions typically impact commodities' prices. Thus, relatively small producers such as South Africa, which are interlinked to the global market, must pay attention to the crop conditions in South America. Still, so far, there seem to be normal conditions. We will continue watching the conditions closely.
WANDILE SIHLOBO
Email: wandile@agbiz.co.za
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