Agri Trends 1 September 2017 Grains, Oilseeds, Livestock & Fibres

Huge maize crop, got you stuck in a maze?

The National Crop Estimates Committee in their 7th crop estimate increased white maize production by 146 500 tons (1.54%) and yellow maize by 297 675 tons (4.16%). The size of the total maize crop has been set at 16.4 million tons up by 2.78%.

Both white and yellow maize prices are expected to trade sideways in the long term (next coming months); most changes will mainly be driven by the international fluctuations and the Rand volatility.  Minimal price movements occurred on the maize market, with the release of the latest CEC crop size estimate, as the market has priced in the huge crop, however SA is still looking to export its large crop, to reduce very large carry-over stock.

Any major price decisions/trend shifts will probably occur, once there’s more certainty in the market, about maize planting decisions taken by producers.

Highlights

Grains & Oilseeds

• The wheat tariff publication date/ frequency remains an uncertainty, after triggering to R379.34/ton on the 11th July 2017 without publication, a new tariff (R752.35/ton) was triggered on the 8th August 2017. The wheat import tariff still remains on R947.20/ton since 27 June 2017.
• Internationally wheat prices are expected to remain under pressure well into the next year, because of large global stocks & crop, thanks to the Black Sea great crop prospect. CBOT wheat prices rallied in June and July, during the dry-spell that gripped the northern US plains wheat, however prices have fallen since due to the abundant global stocks.  Russian wheat crop will be entering the market soon, as their harvest process is about to begin in the next month, global wheat prices are expected to remain under pressure. Local imports expected to increase in September- October.

 Livestock & Fibre

• The low cost maize and improved grazing conditions this season prompted producers to hold weaners back in order to do back grounding on cheaper maize making money from the feed margin component. The latest CEC estimates report shows an additional increase in total maize production to: 16.4 million tons ( up by 2.78% from the previous estimate.
• The number of live cattle marketed from Namibia into South Africa continues to strengthen month on month. 3.9% more live cattle were exported in July 2017 compared to June 2017. This may be attributed to strong demand in South Africa, on the back of scarcity of the weaners.
• Red meat prices may gain support from increased demand during month end.

For a detailed update please see attachment