•••• GRAIN MARKET PROSPECTS
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February 2017 > CONTINUED FROM PAGE 41
There was also a huge difference between white and yellow maize prices in respect of the March 2017 contract . Graph 3 reflects the price difference between the March 2017 white and yellow maize contract prices . A difference of up to R1 500 per ton during March 2016 is reflected . This resulted in some of the seed companies having had ultrashort white maize seed cultivated in the USA , which in turn resulted in producers planting more white maize for delivery in March 2017 . The rain came too late to plant early white maize under dryland conditions for delivery in March 2017 .
Graph 4 is used fairly often . It reflects the price movement of white maize in terms of the calculated import parity , export parity and the Safex price per contract month . It is evident that the South African white maize price has the ability to move from the calculated export parity price to the calculated import parity price in one season . The difference between the two parities can be as much as R2 000 per ton . The white maize price is also not limited to the calculated import or export parity . It can move to below the calculated export parity
Graph 5 . Derived import and export parities for white maize ( USA corn ) Safex Randfontein based .
FEB / MAR 2017 • SENWES Scenario
Graph 4 . The price movement of the May 2017 contract price of sunflower and soybeans on the JSE / SAFEX .
level and / or above the import parity level . Producers must realise that a commodity price will not necessarily remain on the same level and therefore they have to make their marketing decisions in good time .
Oilseed complex
SUNFLOWER AND SOYBEANS The same situation which applied in respect of white maize , also applied in respect of oilseed . the stronger rand took its toll . The predicted La Niña also resulted in a more relaxed market . The soybean price moved sidewayas to some extent while the sunflower price decreased somewhat . Calculations which were done after the initial planting estimate indicate that either soybeans or soybean products will have to be imported . The soybean plantings are not enough to meet die oil crushing demand in South Africa . As a result soybean prices moved to the derivative import parity level . Expectations are that the soybean price will remain at this level .
Sunflower prices decreased and calculations indicate that sunflower production in South Africa will exceed the demand . The calculated carry-over stock levels could therefore increase , which would have a negative impact on the price . The European Union also yielded a better crop than the previous season , which resulted in a decrease in the price of sunflower oil and sunflower oilcake . Carryover stock is at a comfortable level , which resulted in a relaxed price environment .
SUMMARY AND CONCLUSION Commodity prices have been under severe pressure lately . The expected large crop places further pressure on prices . The rand also strengthened against the dollar . Maize will probably have to be exported and the international maize price is not very high at present . The calculated export parity level is approximately R2 000 lower than the calculated import parity level in respect of maize . Producers should stay in close contact with their grain procurers and utilise marketing opportunities when they arise .