Big harvests for 2020, from summer to winter

Irochka via Fotolia

Despite earlier reduction in output in the Mpumalanga areas and reports that some of the maize in western areas has been downgraded to WM2, the total maize crop of 15.54 million tonnes is 38% higher year-on-year.

In the oilseed complex, the sunflower estimate came in 2.6% higher from the previous estimate at 785,910 tonnes while groundnuts saw 2.3% contraction at 64,800 tonnes. Although the soybean estimate was unchanged month-on-month, the harvest estimate is still 8% higher year-on-year at 1.26 million tonnes, which bodes well for local supply of soymeal.

For the winter crops, the first crop estimate came in by a massive 32.4% year-on-year at 2.64 million tonnes of wheat (74%), barley (19%), canola (5%), and oats (2%) as good rains and snow boosted crop prospects in the producing areas of the Western Cape.

Wheat production is forecast up 27.8% year-on-year at 1.96 million tonnes which will help reduce the import bill as South Africa is still a net importer.

The barley forecast jumped 46.4% y/y with the two smaller crops, canola and oats increased by 29% and 175.8% respectively year-on-year. The seasonal weather outlook is still positive and should see a good finish to the crop season.

Interestingly, grain prices especially maize have been unseasonably strong and will encourage farmers to plant more in the new crop season amid favourable production conditions with the La Nina weather pattern in the forecasts. This however poses upside risk to food inflation which has recently picked up pace in the July update at 4.6% year-on-year in July from 4.5% year-on-year in June 2020.