Agri Trends – 16 March 2018

Weaner cattle producers do well

The production of weaner cattle are a lucrative business.  This is due to excellent weaner calf prices brought about by a depleted national herd, recovery in rainfall, low maize prices and supportive retail carcass prices.  Slaughter house should do excellent in the nearby future.  Producers compete with feedlots and offer carcasses at a discount to slaughterhouses.  However, beef producers need to take care that they take account of their total feedlot costs and not to price their beef carcasses too cheap.  In the long run, it may have a detrimental impact on the profitability of the domestic beef industry.  The export market is important but more so it is important to maintain a strong off takers in the domestic market.

Highlights

 Grains

  • Due to late plantings of some maize crops in the central and western areas, some crops are still in the early development stages. Moisture levels remain critical. The rainfall expected for this week did not materialize.
  • Below expected rains were received in Mpumalanga for the Feb/Mar2018 months. Crops incurred some drought damage, kernel mass may suffer from the stress at this last stages of development.

Wheat

  • Weather forecasts indicate a potential late start of the rainy season, possibly delayed until May or even later.  Weather movements  will remain a key factor to look at as the industry is moving closer to planting season.

 Oilseeds

  • Due to very late plantings of some sunflower crops in the central and western areas. Plants remain vulnerable and susceptible to frost damage should it occur before mid-April, however the probability is low. Should frost occur, this could have crucial impact on the size of the sunflower crop.
  • Soybean crushing margins remain relatively high, pushing demand for soybeans over sunflower seed crushing. This is anticipated to keep sunflower seed prices.

Livestock

  • According to weather forecasts, the probability for rain over the central to western parts of the country remains positive until the middle of April 2018. Favourable rains are welcome to improve soil moisture levels, veldt conditions and dam levels ahead of winter.
  • Increased uptake in livestock prices is expected towards Easter.
  • During January 2018, the average porker price increased by 6.43%, whilst the average baconer price increased by 6.36% year on year.
  • Week on week, import parity prices for broiler strengthened following slight weakness in the currency as well as weekly gains in the international price.

Wool

  • The drought has affected South Africa’s production and according to Cape Wools’ accumulative report, wool receipts up to 9 February were down 9,5 per cent on the corresponding period last season.

Cotton

The 2nd estimate for the 2017/18 production year indicates a cotton crop of 195 530 lint bales for the RSA, an increase of 152% over the previous season and 3% higher from last month’s estimate. Renewed interest in cotton production and favourable prices are reasons the industry deem to have supported the production growth.

 

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Published on Thu, 22nd Mar 2018 - 08:26