Rand weakness supportive of grain markets

FNB wheat predictions
  • US-China trade negotiations are reportedly set to resume following the Trump-XI meeting at the G20 summit in Japan. The USDA’s decision to re-survey hectares will receive much focus in the months ahead.
  • The weekly US Crop Progress report came in at 98% for emergence, with 8% silking relative to the 22% average as of the week ended 7 July 2019. The crop condition rating came in up 1% to 57% in good to excellent condition.
  • Army worm outbreaks are reportedly becoming an issue in China but no reports of extensive damage so far. Meanwhile, the USDA’s Attaché in China was pessimistic about the country’s maize production for 2019/20 and estimated the crop at 230 million tons, much lower than the USDA official number of 254 million tons.
  • US winter wheat harvest progress came in below the 5-year average of 48% but still advanced to 30% complete relative to the week earlier. Nonetheless, yields are worryingly coming in on the lower side. Elsewhere, inclement weather forced the agency IKAR to lower its estimate of the Russian wheat production to 79.3 million tons.
  • US soybean plantings advanced to 92% complete but still lower than the 5-year average of 99%.  Weekly crop progress showed soybean emergence at 83% emerged while the condition rating steadied at 54% in good to excellent condition versus 15% average for this time of the year.
  • Domestically, harvesting is continuing with the delivery progress at 4.1 million tons and about 38% of the expected 2018/19 crop but yields are reportedly on the downside in some areas. The largest share of the deliveries so far is yellow maize (69%) with 31% being white maize as most of the western areas only started recently to harvest.
  • The yearly trend in both the domestic and international grain and oilseed prices remains upwards due to the contraction in planted area and weather concerns..
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