Oilseeds markets have been dominated by the effects of the U.S. trade war with China as markets react to every hint from either side. Price movements have been mixed as the uncertainty’s impact varies from region to region.

In the past 5 years, volatile weather conditions have kept the South African producers on their “knees”. Through these trying times they’ve always remained resilient. Another dry and trying season.

As a result of maize prices increasing to import parity price levels and carcass prices declining due to the suspension of beef exports as a result of SA’s loss of its free Foot-and-mouth disease status, feedlots are near break-even cost levels.

The decrease in the total gross producer value (GPV) of maize for 2019 will be limited by increased maize prices. Due to the severe drought in 2016 the increased price levels maintained the gross producer value of production. It is thus expected to be the case in 2019 as well.

If we do not write about South Africa’s first quarter of 2019 agricultural trade figures, one would assume that there have been limited positive developments in this sector as the past few months have been clouded by unwelcoming news.

The poor performance of South Africa’s agricultural economy in the first quarter of this year has raised questions of whether the contraction was on the back of a decline in investment due to policy uncertainty in the sector.

After a multi-year period in which global grain and oilseed stocks ballooned to record highs due to little disruption in output, the market is suddenly facing some adversity on the production side as well as ongoing disputes that are disrupting traditional patterns of trade.

US Kansas yellow corn prices increased by 2.2% week on week.

South Africa- Agri trends.

Wheat harvesting under way in the Western Cape and yields are looking poor in some areas.

Ordinarily, at this time of the year I would be writing about the upcoming summer crop season, which starts in October.

It is not my usual practice to revisit the subject of a previous column. But in this instance I am compelled to do so because of the fast-changing global agricultural outlook and its implications for prices.

Oilseed prices have been pushed higher by reduced production expectations, particularly worries over the size of the soybean crop in the United States, and strong demand, with large imports by China. Better-than-expected usage in the US biodiesel industry and tighter supplies in Brazil have added to the bullish tone.

The weather has been topical across the Southern Hemisphere because of the La Niña event.

The invasion of one of the world’s two main producers of sunflower oil by the other one has sent oilseeds prices, in an already tight market shooting higher.

Global production is down this month primarily on smaller crops in India and the European Union, only partially offset by an increase for Russia.