Post kept its estimate for the area planted with corn in the 2014/15 MY unchanged at 3.1 million hectares. Post estimates that commercial farmers planted about 2.7 million hectares of corn and subsistence farmers about 400,000 hectares.

So far, South Africa's summer season was satisfactory for corn production. However, as January was drier than normal, follow-up rains are needed in the next three weeks to secure an adequate crop. Two cyclones east of Mozambique hindered rainfall in South Africa over the past few weeks. However, the possibility for normal rainfall in February exists as the cyclones weaken. Hence, post kept its corn production estimate, based on average yields, for the 2014/15 MY unchanged at 12.9 million tons (12.3 million tons for commercial farmers and 600,000 tons for subsistence farmers).

For the 2014/15 MY, post estimates that South Africa will have sufficient stocks to export about 2.5 million tons of corn, as commercial production is expected to exceed 12.0 million tons. For the 2013/14 MY, post brought its export estimate down by 1.0 million tons to 2.5 million tons, as South Africa's deep sea corn exports basically stopped, since last year October, due to an oversupply of corn in world markets. The major markets for South African corn in the 2013/14 MY includes Taiwan, Korea, Japan and Botswana.

Production

Post kept its estimate for the area planted with corn in the 2014/15 MY unchanged at 3.1 million hectares. Post estimates that commercial farmers planted about 2.7 million hectares of corn and subsistence farmers about 400,000 hectares. This estimate is based on the average hectares planted with corn in the past five years in South Africa, information from industry contacts and the first area estimate by the Crop Estimates Committee (CEC) that was published on January 27, 2015.

Except for Mpumalanga and Kwazulu-Natal, that had a late start to the planting season, all other corn producing areas in South Africa had a normal start to the season. During December most corn producing areas received normal to above-normal rainfall. However, January was drier than normal as two cyclones east of Mozambique hindered rainfall in South Africa. As a result, follow-up rains are needed in the next three weeks, especially in the Mpumalanga province and the eastern and central parts of the Free State province. With the cyclones in the process of moving away, the possibility for normal rainfall in February exists. Hence, post kept its corn production forecast, based on average yields, for the 2014/15 MY unchanged at 12.9 million tons (12.3 million tons for commercial farmers and 600,000 tons for subsistence farmers). This means the 2014/15 MY corn crop will be 14 percent less than the record corn crop of 15.0 million tons harvested in the 2013/14 MY.

The following table details area planted and production figures of white and yellow commercial and subsistence corn for the 2012/13 MY (actual), 2013/14 MY (estimate) and 2014/15 MY (forecast).

Area planted and production of commercial and subsistence corn in South Africa

Area 1,000ha

Yield

t/ha

Prod.

1,000 t

Area

1,000ha

Yield

t/ha

Prod.

1,000 t

Area

1,000ha

Yield

t/ha

Prod.

1,000 t

MY

2012/13

2013/14

2014/15

Commercial corn

White

1,620

3.5

5,607

1,551

5.0

7,697

1,550

4.2

6,550

Yellow

1,160

5.3

6,204

1,137

5.8

6,610

1,150

5.0

5,750

Sub Total

2,780

4.2

11,811

2,688

5.3

14,307

2,700

4.6

12,300

Subsistence corn

White

320

1.4

460

288

1.6

447

300

1.5

450

Yellow

137

1.6

215

120

1.9

228

100

1.5

150

Sub Total

457

1.5

675

408

1.7

675

400

1.5

600

TOTAL

3,237

3.9

12,486

3,096

4.8

14,982

3,100

4.2

12,900

Consumption

Post forecasts only a marginal increase in the demand for corn in the 2014/15 MY to 10.6 million tons, as South Africa's economy will continue to stay under pressure due to electricity constraints and a relatively weak exchange rate.

Post is keeping its previous estimate for a five percent increase in the commercial demand for corn in the 2013/14 MY unchanged. Due to lower corn price compared to the previous season, post foresees a five percent increase in commercial corn demand. Commercial corn demand is expected to reach 10.3 million tons with South Africa consuming 6.2 million tons of white corn and 4.1 million tons of yellow corn. Post expects commercial corn usage for human consumption will be equal to corn usage for animal consumption at 4.9 million tons.

Table outlines the commercial consumption for white and yellow corn for the 2012/13 MY (actual), 2013/14 MY (estimate) and 2014/15 MY (forecast).

The commercial consumption of white and yellow corn in South Africa

CORN

1,000 Mt

White

Yellow

Total

White

Yellow

Total

White

Yellow

Total

MY

2012/13

2013/14

2014/15

Human

4,118

464

4,582

4,420

500

4,920

4,500

400

4,900

Animal

652

4,063

4,715

1,620

3,310

4,930

700

4,400

5,100

Other

114

367

481

160

290

450

100

500

600

TOTAL

4,884

4,894

9,778

6,200

4,100

10,300

5,300

5,300

10,600

Source: South African Grain Information Services (SAGIS); Grain SA

Note: Please note that consumption figures in the PS&D table also include corn utilized by the subsistence farming sectors and commercial on-farm usages.

Trade

For the 2014/15 MY, post estimates that South Africa will have sufficient stocks to export about 2.5 million tons of corn, as commercial production is expected to exceed 12.0 million tons.

For the 2013/14 MY, post estimates that South Africa will export about 2.5 million tons of corn. This estimate is 1.0 million tons lower than post's previous estimate of 3.5 million tons, as South Africa's deep sea corn exports basically stopped since last year October, due to an oversupply of corn in world markets. In December 2014, South Africa signed a protocol for phytosanitary requirements for corn exports to China. This agreement opens the approximately 2.5 million tons China corn market for South Africa. However, South Africa will most probably only make use of this opportunity in the 2014/15 MY.

So far in the 2013/14 MY (up to January, 16), South Africa has already exported 1.7 million tons of mainly yellow corn. The major markets for South African corn in the current marketing year include Taiwan (679,185 tons yellow corn), Korea (214,474 tons yellow corn and 2,188 tons white corn), Japan (198,197 tons yellow corn) and Botswana (117,870 tons white corn and 20,835 tons yellow corn).

Export and import countries for white and yellow corn (1,000 tons)

MY

2012/13

(May, 2013 – Apr, 2014)

2013/14

May, 2014 – Jan 16, 2015

White corn

Yellow corn

White corn

Yellow corn

Export Destinations

Angola

6

2

0

1

Botswana

166

47

118

21

Cameroon

1

1

0

4

Italy

0

0

0

50

Japan

0

596

0

198

Korea

0

148

2

214

Lesotho

50

9

82

8

Madagascar

0

8

0

0

Mexico

190

0

0

0

Mozambique

80

23

64

18

Namibia

152

46

44

24

Nigeria

0

14

0

0

Portugal

0

0

0

53

Swaziland

23

41

17

32

Saudi Arabia

0

0

0

56

Taiwan

0

166

0

679

Zimbabwe

258

29

58

4

TOTAL EXPORTS

926

1,130

385

1,362

Import Suppliers

Ukraine

0

80

0

0

TOTAL IMPORTS

0

80

0

0

Prices

SAFEX prices as of January 20, 2015 are shown in Table. Both white corn and yellow corn prices are only marginally higher than three months ago driven mainly by the depreciation in the South African exchange rate (the rand depreciated by almost five percent against the United States dollar over the past three months). On a year-on-year basis, corn prices are almost 40 percent lower, as corn prices traded at import parity levels a year ago, driven mainly by relatively low stock levels and drought conditions in the Northwest province.

SAFEX prices for corn

SAFEX Futures prices (as of 01/20/2015)

Commodity

2015/01

2015/03

2015/05

2015/07

2015/09

White corn

R1,999/t

($175/t)

R2,033/t

($178/t)

R2,040/t

($178/t)

R2,035/t

($178/t)

R2,071/t

($181/t)

Yellow corn

R2,014/t

($176/t)

R2,052/t

($180/t)

R2,059/t

($180/t)

R2,052/t

($180/t)

R2,091/t

($183/t)

PS&D Table for Corn

Corn

2012/2013

2013/2014

2014/2015

Market Begin Year

May 2013

May 2014

May 2015

South Africa

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

3,238

3,237

3,100

3,096

3,200

3,100

Beginning Stocks

3,676

3,676

3,064

3,186

3,339

4,168

Production

12,365

12,486

14,750

14,982

13,500

12,900

MY Imports

79

80

25

0

25

0

TY Imports

0

0

79

80

25

0

TY Imp. from U.S.

3

0

4

0

0

0

Total Supply

16,120

16,242

17,839

18,168

16,864

17,068

MY Exports

2,056

2,056

3,000

2,500

2,200

2,500

TY Exports

2,398

2,398

2,104

3,000

2,500

2,500

Feed and Residual

5,100

5,100

5,400

5,400

5,600

5,500

FSI Consumption

5,900

5,900

6,100

6,100

6,200

6,300

Total Consumption

11,000

11,000

11,500

11,500

11,800

11,800

Ending Stocks

3,064

3,186

3,339

4,168

2,864

2,768

Total Distribution

16,120

16,242

17,839

18,168

16,864

17,068

1000 HA, 1000 MT, MT/HA