Agri Trends 26 September 2017 Grains, Oilseed & Hide Prices

Feed the maize market during times of increased uncertainty

The following time period until the end of 2017 will be a bumpy ride for the Rand.  An increase in policy uncertainty in the run up to the ANC elective conference by the end of 2017 will pose opportunities to price maize. The global corn market reached a bottom and prices trade sideways. Harvesting already started in the USA and there is no bullish potential left in a weather market. Domestic maize producers need to consider lowering their plantings in the coming season as the rate of exports are too low to make a significant dent in the maize carry out by the end of April 2018.  In order to continue producing maize at profitable levels producers will have to ration supply in order not to harm the present price levels.

The Livestock & Fibre Section of this report, will not be published for the next 2 weeks.

Highlights

Grains & Oilseeds

• A reduction in the wheat import tariff to R379.34/ton as published on the 8th September 2017 placed wheat prices under pressure. The lower import tariff and subsequent lower import parity price levels leads to an increased supply of wheat on the domestic market.
• Some irregularities during the Kenyan elections during early August have seen the Supreme Court annul those elections. New elections will be held on October 31st, As it stands now, the prior arrangement still holds and the government remains to subsidize white maize and will do so till end September. The entire white maize supply is imported mainly from South Africa and Mexico. Kenyan contacts expect a further 120 000 ton (white maize)WM vessels each from SA and Mexico and a further 20 000 ton from white maize Zambia to be offloaded offload during October.
• The current rate of exports is limited and not sufficient to reduce the maize carry out by the end of the current marketing year.

Hide Prices

• The average hide price over the past week remained unchanged at R12.64/kg green. Prices are anticipated to remain stable, until the Leather Trade Fair is hosted  from 8-10 October 2017 in Milan, Italy. Prices will take direction after that fair. The hide market is currently under pressure. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies.

For a detailed update please see attachment