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COLUMN GRAIN MARKET PROSPECTS > CONTINUED FROM PAGE 37
White and yellow maize The NCEC adjusted its latest maize crop estimate of 26 April 2016 marginally downwards . The expected maize crop is 7.054 million tons at present , which is nearly 30 % lower than the crop of the previous season . According to the recent NAMC supply and demand report , approximately 1,3 million tons of white maize and 2,4 million tons of yellow maize will , in all likelihood , have to be imported . The white maize price increased to well beyond R5 200 per ton during January 2016 . Concern about the destination from which South Africa will be able to import white maize and the weakening rand are the main reasons for the drastic price increases . The price still forms on the level of the calculated import parity of American and Mexican GM-free white maize .( Graph 5 ).
A very uncertain factor in the market is the availability and cost of white maize to be imported during the marketing year . The table below reflects the calculated import parity of non-GM white maize which can be imported from the USA . It seems as if local importers are offering GM-free American white maize at prices
38 JUN / JUL 2016 • SENWES Scenario
Grafiek 5 . Die kontantprysbeweging van sonneblom en sojabone op die JSE .
Graph 5 . The cash price movement of white maize on Safex ( R / t ).
Table 1 : The calculated import parity ( R / ton ) of America non-Gm white corn at varying CBOT prices and exchange rates
Delivery point : Randfontein Freight : $ 27 Commodity : White maize Basis CBT to FOB ($/ t ) $ 27 Date : 26 May 2016 Premium white maize $ 31
Exchange rates R /$ which are R100 to R150 higher than the calculations . The costs relating to white maize imports are significantly higher than yellow maize imports due to the additional premiums which apply . The premium amounts to between $ 40 and $ 50 per ton at present . The shipping freight is also higher from the Gulf than that of South-American corn being imported . Expectations are that the maize price will be well-supported until January 2017 , by which time there should be more certainty about the new season ' s maize .
Oil seed complex : Sunflower and soya beans : Due to the drought of the past season , sunflower and soya beans will have to be imported this year . Should it make financial sense , imports will mostly involve oil and oilcake of the two commodities . Sunflower and soya bean prices have declined significantly since January 2016 due to two reasons ,
Premium non-GM wit : $ 11 Price ($/ bu )
3,50 3,60 3,80 3,90 4,00 4,10 4,20 4,30 14,00 R4 038 R4 093 R4 204 R4 259 R4 314 R4 369 R4 424 R 4 479 14,25 R4 098 R4 155 R4 267 R4 323 R4 379 R4 435 R4 491 R 4 547 14,50 R4 159 R4 216 R4 330 R4 387 R4 444 R4 501 R4 558 R4 615 14,75 R4 219 R4 277 R4 393 R4 451 R4 509 R4 567 R4 625 R4 683 15,00 R4 279 R4 338 R4 456 R4 515 R4 574 R4 633 R4 692 R4 751 15,25 R4 339 R4 399 R4 519 R4 579 R4 639 R4 699 R4 759 R4 819 15,50 R4 399 R4 460 R4 582 R4 643 R4 704 R4 765 R4 826 R4 887 the first being the stronger rand and the second being the fact that the normal seasonal trend is being followed .
At this stage price formation of the two commodities takes place on the calculated derived price level . This is when oil and oilcake are imported and where calculations are made to determine what the derived prices for the two commodities would be should sunflower , soya bean oil and oilcake be imported . At this stage the prices for both commodities are in the region of R6 300 per ton . The prices of both commodities usually start to stabilise from the middle of May every year . The prices of the two commodities should be supported to a large extent until the end of December .
SUMMARY AND CONCLUSION The prices of all the important grains and oil seeds are currently being established in the region of the calculated import parity levels . This is due to the fact that we will have to import some of the commodities as a result of the drought of the past season . The exchange rate plays a huge role in the price formation process and the stronger rand resulted in pressure on commodity prices during the past week . There should be a fair level of support for all the summer crops until December 2016 , by which time there should be more certainty about the new season . Talk to your grain broker and utilise the price levels while you can .