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CO L U M N
THYS GROBBELAAR
GRAIN MARKET PROSPECTS:
July 2016: Market developments
THYS GROBBELAAR
SENIOR GRAIN ANALYST,
SENWES GRAINLINK
INTERNATIONAL FUNDAMENTAL
FACTORS
The world economy in terms of
GDP-growth remains slow. The
world GDP-growth is calculated
at 3% at present. As we already
know, the stagnation of the Chinese economy plays a huge role.
The situation resulted in soft
commodities not being the most
popular investment option in the
world, which does not support
the price. The Chinese economy is
the second largest economy in the
world, after the USA.
Dollar/euro exchange rate
movement
The dollar systematically weakened since the beginning of 2016,
which supported commodity
prices to some extent. The referendum regarding Britain's continued
participation in the European
Union, the results of which became known recently, resulted in a
stronger dollar against some of the
most important currencies, such as
the euro. However, it is uncertain
what the future holds (Graph 1).
Graph 1. Dollar/euro exchange rate movement.
Graph 2. World production, consumption and carry-over stock of maize.
Energy prices
The price of Crude Light Sweet oil
was in the region of $52 per barrel
*In the previous edition of Senwes Scenario it was
indicated in the heading that the article dealt with
market developments in March. It should, hovever,
have been May. We apologise for the incorrect
heading.
40 AUG/SEP 2016
Graph 3. The spot price movement of American yellow corn on CBOT (c/bu).
• SENWES Scenario