Mzansi Agriculture Talk

Market Synopsis

Agri – Market Synopsis, Week 39

Wool
“The wool market continued its upward trend on the 7th sale of the 2020/21 wool season with a strong performance on today’s sale, driven by better market sentiment and a weaker SA rand.

After 1 264 bales were withdrawn prior to the sale, 7 713 bales came under the hammer, of which 92% was sold. The market gained 6.2% from the previous sale, with the rand trading 3.3% weaker against the US$, resulting in a 2,7% increase in US$ terms.

The Australian market had a strong performance last week, increasing by 10.3%, before shedding some of the gains this week with a 3.9% drop in the market.  Good quality fine merino wools especially finer than 18.8 microns achieved excellent prices, with sustainable certified wools (RWS) attracting very good competition throughout the auction and achieving good premiums” – Cape Wools SA,

Grains
“US maize prices saw moderate overnight gains heading into Thursday’s session but couldn’t hold onto them after spillover weakness from wheat triggered some technical selling. Maize export sales reached 1.226 million tons, which represented a moderate decline from a week ago. Mexico topped all destinations. Maize export shipments were not quite as robust, with 934 000 tons. China was the No. 1 destination.

The local maize market found mostly support yesterday and traded stronger for the day in most of the contract months of both white and yellow maize currently listed. The white maize market traded R12 / ton higher for delivery in October 2020 for the day at R3 500 / ton to close. The yellow maize market traded R8 / ton higher for delivery in October 2020 to close at R3 395 / ton” – Ikageng Maluleke, agricultural economist, Grains SA,

Fruits and Vegetables
“In the citrus category, weekly exports of lemons increased by a whopping 28% year-on-year (y/y) for the YTD at 24.83 million (15kg cartons) cartons with the Middle East (35%), Europe (35%), and the UK (9%) accounting for 79% of the total shipments.

On the domestic market, we observe resilience across most vegetable prices under review relative to last year except for onions that still show a slight decrease y/y. The biggest gainers are butternuts, cabbages, and potatoes with yearly increases of 73%, 32%, and 30% respectively relative to the 2019 levels. In the fruit category, there are signs of moderation with grapes, mangoes, and apples decreasing by 19%, 13%, and 5.4% respectively y/y” – Paul Makube, senior agricultural economist, FNB,

Pork
“During August 2020, South Africa exported 745.7 thousand tonnes of pork products to 14 countries at an average price of R29.57/kg (1.51 EUR, 1.78 USD).  Imports over the same period reached 979 thousand tonnes and originated from 6 countries at an average price of R38.18/kg (1.95 EUR, 2.29 USD)” – Pork SA, Business Intelligence

Dairy
“Unprocessed milk production for August 2020 is estimated at 289 million litres, 1,46% less than in August 2019. Milk production in August 2020 is indicative of the negative farm economics that have been plaguing the primary sector. Market signals from the MPO, since early 2018, indicated that the cost–price squeeze is severe in farm economics, due to too low producer prices and high cost increases. Furthermore, some important milk production areas are still relatively dry with low dam levels.

Cumulative unprocessed milk production for the first eight months of 2020 (inclusive of August and including February only as a 28-day month) was 2 035 million litres indicating a decline of 1,1% in comparison to the same period in 2019” – Milk Producers Organisation

Tractor and Combine Harvest Sales
“September tractor sales of 529 units were significantly (almost 23%) more than the 431 units sold in September last year. On a year-to-date basis tractor sale are now five units more than for the same period last year. In September there were 11 combine harvester sales, one unit less than in in September last year. On a year-todate basis combine harvester sales are now 16% up on the same period last year. The excellent tractor sales in September reflect the positive sentiment currently prevailing in the market. Good crops were harvested across most of the summer-cropping areas” – Karel Munnik, Chairman: South African Agricultural Machinery Association

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