Ample Soybean Harvest in South Africa
We see the large deliveries, but the quality remains a concern.
At the end of last month, we knew that South Africa would have an excellent soybean harvest in terms of volumes. However, we had doubts about the quality in some areas due to the excessively wet weather conditions that persisted through to the end of April. We remain concerned about the quality of the crop in certain regions.
The Crop Estimate Committee placed South Africa's 2024-25 soybean harvest estimate at 2,33 million tonnes, which is up 26% from the previous season. The annual uptick is primarily due to improved yields recovering from last year's drought.
The area plantings are up slightly, and therefore do not constitute a significant boost to the estimate published by the Crop Estimate Committee.
But the latest producer deliveries data suggest that the actual soybean harvest may well have surpassed what the Crop Estimate Committee estimated. For example, on June 20, South Africa's soybean producer deliveries were at 2,46 million tonnes. This represents a 33% increase from the 2023-24 production season. Importantly, this is the second-largest harvest on record, and it is not even final. The record harvest of 2,77 million tonnes was recorded in the 2022-23 production season.
On June 27, the Crop Estimate Committee will release its fifth production estimate for 2024-25 summer crops. It is in this release that the Committee will adjust its estimate of 2.33 million tonnes, released on May 27, to reflect the current deliveries or a slightly higher amount.
Importantly, this also means South Africa will remain a net exporter of soybeans and soybean products. We are far from the time when we were a net importer of soybean products for animal feed, mainly oilcake. We are now in a net exporter position.
The market has responded positively to these developments. For example, on June 24, the soybean spot price traded at R7,259 per tonne, down 16% year-on-year. The contract prices for September and December are also down roughly 15% from a year ago. This reflects both the large domestic harvest and ample global supplies.
Overall, this is excellent news for the South African livestock and poultry industries that use soybeans as a key feed product.
