Keeping a close eye on global
grain and oilseed crops
I
f the US maize crop had been at an
advanced stage of growth, the latest
US Department of Agriculture
(USDA) report would have convinced
me that the supplies were in better
shape than initially feared.
In its latest report, the USDA increased
its estimate for maize production in that
country by 1% to 352 million tons. This
improvement, coupled with an uptick
in production in the Black Sea Region’s
estimates, led to a 1% increase in the
2019/2020 global maize production estimate
to 1,1 billion tons. This will, however, still
be 2% less than the 2018/2019 harvest.
But the crop is not yet at an advanced
stage of development, and the production
estimates could change notably in next
month’s update report. On 14 July, only
17% of the US maize crop was at the
silking stage of growth, compared with
59% in the corresponding week in 2018,
and a five-year average of 42%. This is a
result of late plantings in most parts of
the US due to excessively wet weather
conditions during the preceding period.The excessive rain not only slowed down
plantings, but also increased the chance
of poor yield. To this end, analysts will
continue to monitor developments through
the USDA’s Weekly Crop Conditions
report. Only 58% of US maize was rated
as being in good or excellent growing
condition in the 14 July estimate, compared
with 72% in the corresponding period
in 2018. This alone tells us that the US
maize crop is not in good condition.
For South African maize farmers and
maize users, developments on the US market
are important and have a strong influenceon our local market, which is generally
linked to global agricultural markets.SOYA BEAN FORECAST
REVISED DOWN
The other crop that I am viewing through
the same lens as maize is soya bean.
But, unlike maize, the US soya bean
production estimate was revised down
7% in June to 104 million tons. This
contributed to an overall 2% month-on-
month decline in the global soya bean
production estimate to 347 million tons.
Moreover, global soya bean production
is 4% lower than that of the 2018/
season. It is not only the US that is
contributing to the decline in global soya
bean prospects, however, as there are also
expectations of a poor yield in Argentina.
As with maize, we cannot take the
current soya bean production figures as
an absolute indication of what is likely
to transpire by the end of the season,
because the crop is still at an early stage
of growth. In addition, the season started
late due to excessive moisture levels.
By the week of 14 July, only about 94%
of the US soya bean crop had emerged,
compared with last year, when it was 100%.
And of the crop that emerged, only 22%
was blooming, compared with 62% for the
corresponding date last year. In terms of
crop-growing conditions, data from the
USDA shows that 54% of the soya bean crop
was rated good or excellent compared with
69% for the corresponding period in 2018.
While South Africa is not a major
importer of soya bean, developments on
the global soya bean market do influence
the local market and prices of soya bean
by-products. The most notable is soya bean
oilcake, of which South Africa imports, on
average, about half-a-million tons a year.
The USDA’s August issue of the World
Agricultural Supply and Demand Estimates
report will be released on 12 August.
This will give us a clearer insight into
global grain and oilseed supplies.GLOBAL SOYA BEAN
PRODUCTION IS
DOWN 4% ON LAST
YEAR’S SEASON
AGRIBUSINESS
PERSPECTIVE
BY WANDILE SIHLOBO
Wandile Sihlobo is head of economic
and agribusiness intelligence at Agbiz.
Email him at [email protected].
OPINION & ANALYSIS
2 AUGUST 2019 farmer’sweekly 11