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G RAI N M AR K E T P R O S P E C T S
September 2017
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the USA. The higher the HRW
price, the lower the calculated
import tariff used in the calculat
ed import parity, which normally
reflects in the JSE wheat price.
The American HRW price and
the JSE wheat price have fortu
nately stabilised. The import tariff
calculations must, however, be
monitored carefully. The SAGIS
website can be used for this pur
pose.
Oil seed complex:
Sunflower and soybeans:
Based on the seventh crop esti
mate of the NCEC, the NAMC
calculates that the carry-over stock
of sunflower will be in excess of
192,000 tons for the marketing
year. The sunflower crop estimate
was adjusted upwards significant
ly. The current sunflower price
on the JSE is lower than the
calculated derived export parity.
Relatively high carry-over stock
levels and expected expansion of
the planting area are the main
reasons.
Graph 5 reflects the seasonal
price trend of sunflower. The
NCEC predicts a crop of 870,095
tons and the NAMC indicates
calculated carry-over stock levels
of 142,000 tons. In the case of
both sunflower and soybeans,
there is a perception that the
plantings will be expanded during
the coming season. The over-sup
ply of maize and resulting low
prices are the main reasons. Both
the sunflower and soybean pric
es will increase at a slower rate
towards December than in other
years.
According to the calculations
of the NAMC, we will end with
carry-over stock levels of 223,662
tons. The soybean supply is high
er than the demand and approxi
44
Graph 4. American Hard Red Winter and Safex cash wheat price.
Graph 5. The long-term season price movement of sunflower (spot price) on
Safex.
mately 30,000 tons will have to
be exported. The soybean price
is currently lower than calculated
export parity. It is expected that
the seasonal trend will be fol
lowed. The producer should stay
in contact with his grain market
ing advisor in respect of oilseeds
as well.
SUMMARY AND CONCLUSION
The current price levels of all the
summer crops are under pressure
at present. The summer crop is
getting larger with every CEC-
estimate, particularly in respect
of the maize situation. We trust
that maize exports will pick up
OCT/NOV 2017 • SENWES Scenario
in order for the carry-over stock
levels to decrease and for prices
to recover. It is difficult to create
international markets for white
maize. White maize is not popular
for use in animal feed abroad and
local white maize is unelastic. This
means that cheaper white maize
meal prices will not necessarily
result in a dramatic increase in
human consumption.
Although miracles cannot be
brought about at present, the pro
ducer should stay in contact with
his grain marketing advisor. Plans
can be made to manage the low
price to the best of the producer's
ability.