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Grain SA's Oilseed Market Commentary- South Africa

Soybeans: In the international context of soybeans, the expectation is that world production for the 2019/20 season may fall by about 5.3 million tons from the previous season's production.The expected decline in world production can largely be attributed to the expected decline in production in the US and Canada. An increase in production in China and South America is also expected, which will cancel out the decline in US and Canadian production to a certain extend. In the US, the expectation is that the closing stocks will reach a new record of 29.5 million tons by the end of the 2018/19 season. It is also expected that the closing stocks may increase even further in the 2019/20 season, depending on the production that is being realized.

The American soybean plantings are still taking place at a slow pace compared to previous years. According to the latest weekly production progress report, soybean plantings were indicated to be 77% complete. This is significantly lower than the average rate of 93% complete at the same time of season. It is also expected that the world soybean stocks will reach a new record of 110 million tons by the end of the 2018/19 season. This will serve as a reasonable buffer against the lower expected production in the Northern Hemisphere. Local: The local soybean market found support last week and traded stronger for the week in most of the contract months currently listed. The local market found good support at the international market, which also traded mainly stronger.

Sunflower seed: The expectation in the market is that world sunflower seed production will reach a new record during the 2019/20 season. The season's production expectations have been revised upwards from the previous forecast and are now estimated at 52.7 million tons. The upward adjustment in the  world production forecast can be largely attributed to the increased area planted as well as favorable production conditions in the largest producing countries. It is also expected that world sunflower seed processing will increase this season to a new high of 47.8 million tons. Local: The local sunflower seed market traded mixed last week and closed almost unchanged for the week.


Canola: The expectation for the world's rapeseed and canola production is that it should be significantly less in the coming season. This is mainly due to adverse weather conditions prevailing during planting in Canada and Australia, in particular, which has had a detrimental effect on production potential. In the EU, production expectations now look better after the urgent need for rainfall in the major production areas arrived in time. Local: The local canola plantings are complete and the production conditions are mostly good.


Groundnuts: The groundnut exports from the six largest exporting countries increased by 8% during the first 3 months of 2019. This has largely made up for the decline in exports reported between October and December last year. During 2018, there were significantly fewer groundnut exports that took place from the US, Argentina and India due to the lower production realized in 2018 in these countries. In Argentina this season's production expectations look good and Argentina should play a more prominent role in the international export markets during 2019. Local: In the local market, the peanut supplies are low due to the poor peanut production year that has played out this season


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