The most appropriate thing to write today, given that I am currently gazing over the beautiful wine farms of Stellenbosch, would indeed be wine. Instead, I will be blogging about good old maize, as I have just received the United States Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimates report for major grains and oilseeds.

Broadly speaking, the global production estimates of maize, rice and wheat were lifted marginally from last month’s estimates. But, this does not change the fact that the supplies of these grains will be tight in the global market in the 2018/19 marketing year, due to growing consumption and an expected annual decline in wheat production. I will discuss this in detail over the weekend, this afternoon I want to zoom into the South African maize story, albeit not offering new insights from what I have already discussed last month.

The USDA left its estimate for South Africa’s 2018/19 maize production unchanged from last month, at 13.0 million tonnes. This is down by 4 percent from the previous season due to expectations of lower yields. This figure accounts for both commercial and non-commercial maize estimates.

Remember, South Africa consumes about 10.8 million tonnes of maize a year. We will probably have about 3.3 million tonnes of opening stocks when the 2019/20 marketing year starts in May 2019. Therefore, if the USDA’s estimate materialises, South Africa’s maize supplies will be in good shape over the next two years, all else being equal.

Above all, the one key risk is the expected weak El Niño later in summer and its potential impact on crops. The recent communication from the South African Weather Service suggests that the maize-growing areas could experience dryness between the end of January and March 2019. Now, this is concerning as this period coincides with pollination – a development stage of the crop that requires moisture. I will keep a close eye on this over the coming months.

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