•••
• •
G R A IN MA RKE T PR O SPE CT S • •
Price drivers in the local
grain and oilseeds markets
be drastically lower this season.
However, this did not materialise
and the price decreased signifi
cantly. The maize price followed
the seasonal trend to a large
extent. Expectations are that the
American maize price will move
sideways until December 2017.
Energy prices:
As we know, the Americans use
approximately 35% of their total
maize crop to produce ethanol.
Various changes to crude-oil
exploitation techniques resulted
in a sharp increase in crude-oil
production world-wide. On the
other hand, the application of
renewable energy, such as wind,
was expanded significantly. World
carry-over stock levels of crude-
oil increased sharply, which put
pressure on the crude-oil price.
The demand for crops such as
maize and soybeans for renewable
energy purposes decreased sig
nificantly, which put pressure on
commodity prices. Brent crude-oil
trades at $53 per barr el against an
average price of more than $100
per barrel for the period 2010 to
2014. Crops such as maize and
soybeans are not receiving much
support from the current crude-
oil price.
White and yellow maize price
trends on the South African
exchange
The seventh crop estimate of
the National Crop Estimate
Committee (NCEC) for this sea
son indicates the largest crop in
South African history. The white
maize crop estimate increased by
146,000 tons and yellow maize by
297,000 tons. As in the 2014/15
marketing year, the crop is getting
larger and larger. According to
the calculations of the National
Agricultural Marketing Council
(NAMC), the exportable sur
plus will be approximately 2,3
million tons of white maize and
2,1 million tons of yellow maize.
For this reason, white and yellow
maize are trading at the calculated
export parity price..
Situation in respect of exports:
At the time of writing this article,
364,100 tons of white maize and
737,900 tons of yellow maize had
been exported. It is already the
17th week of the 2017/18 mar
keting year. Theoretically 751,900
tons of white maize should have
been exported so far in order to
get the exportable white maize
out of the country in time. In
the case of yellow maize, 686,650
tons should have been exported
by now. The yellow maize exports
are on track, but the white maize
exports are not on track. The
open interest position of white
and yellow maize on the JSE is
approximately 3,55 million tons
for the months of March 2018
to July 2018. This could result
in white and yellow maize prices
moving around the calculated
export parity level for longer than
expected.
The next graph reflects the
white maize stock stored at silo
owners and grain processors, as at
30 July 2017. 1,22 million tons
of white maize were delivered to
silo owners and processors during
August, which could further
increase the stock in storage. This
involves large quantities of white
maize - far more than the 9 year
average stock stored.
Wheat
The cash wheat price decreased
dramatically during the past
month. The one reason is that the
price of the American Hard Red
Winter Wheat (HRW) increased
dramatically as a result of the
drought in the northern states of
> CONTINUED ON PAGE 44
Graph 3. Carry-over stock of white maize per month in SA over marketing years
(Sagis).
SENWES Scenario • OCT/NOV 2017
43