He also provides more information about the latest developments in the agricultural sector. 

See PODCAST below

In this week’s segment with Agbiz, Sihlobo takes a look at what global maize and soybeans harvest numbers look like.

“The dominant news out of South America has been of drier weather conditions and frequent downward revision of crop estimates, mainly by the local forecasters. However, global forecasters such as the International Grains Council (IGC) and the United States Department of Agriculture (USDA) have maintained a somewhat optimistic view of South America's crop conditions, specifically maize production.

“This optimism has implications for global maize supplies. For example, Brazil and Argentina collectively account for 14% and 50% of global maize and soybean production, respectively, hence the concerns about crop conditions in this region have implications on global supplies and prices.
 
“In the recent monthly updates, the IGC and USDA left the 2021/22 global maize production at 1,2 billion tonnes, up by 6% year-on-year (y/y). This is supported by an expected large harvest in the US, Brazil, Ukraine, China, the EU, and Russia.

“The IGC forecasts the global maize stocks for the 2021/22 season at 281 million tonnes, up by 1% year-on-year. Nevertheless, this is slightly lower than the ' 'USDA's stock's forecast of 302 million tonnes, up by 4% y/y, partly due to differences in consumption forecasts,” explains Sihlobo.
 
He adds that Agbiz is of the opinion that the USDA and IGC's latest 2021/22 maize production estimates might not have fully accounted for poor yields in parts of Brazil following the drier weather conditions.

“We make this point through observations of these institutions view of South 'Africa's 2021/22 maize crop, which the IGC placed at 15,8 million tonnes (down 6% y/y). Meanwhile, the South African observers believe that the crop could be somewhat smaller than this estimate because of possible lower yields in some regions following the heavy rains. The 'country's official production forecast will be released on 28 February.
 
“Unlike maize, the IGC currently forecasts Brazil's 2021/22 soybeans production at 127 million tonnes (down 8% y/y), Argentina's harvest at 42 million tonnes (down by 10% y/y), and Paraguay's 2021/22 soybean harvest at 6 million tonnes (down by 34% y/y). Consequently, the 2021/22 global soybeans production is at 353 million tonnes, down by 4% from the previous season. Consequently, the 2021/22 global soybeans stocks are down 19% y/y, estimated at 43 million tonnes.
 
“Rice and wheat production are not in a similar spotlight as soybeans, as production forecasts have remained relatively stable since last year. The 2021/22 global rice and wheat production is estimated at 510 million tonnes (up by 1% y/y) and 781 million tonnes (up by 1% y/y).
 
“Regarding the price direction of these major grains and oilseeds, we think maize prices could trade sideways in the near term as the stock levels are still expected to be at comfortable levels. We will consistently monitor the crop conditions in the region as downward revisions of the crop forecast would influence the stock levels and after that, price direction.
 
“In soybeans, the downward revision of the production estimates will add upward pressure on prices. Additionally, there is already upward pressure on the vegetable oils prices, which emanated from prospects of a lower palm oil harvest in Asia and the generally strong global demand for vegetable oils.

“In terms of rice, the price direction has trended sideways to downwards in the recent months; we expect the trend to continue in the near term. For wheat, the rise in global consumption has provided upward support to prices in recent months.

“Still, the wheat prices shouldn't be as volatile as what we could see in soybeans and maize, where the weather conditions matter a lot for the near-term price direction,” concludes Sihlobo.

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