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G RAI N M AR K E T P R O S P E C T S
April and May 2017
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in a large number of producers
not having traded or hedged their
grain. This could result in further
pressure on prices during harvest
time. Producers should contact
their grain marketing advisors on
a regular basis in order to utilise
opportunities over the short term
and to do the necessary to manage
the low price level situation over
the longer term. Certain market-
ing instruments can be used to
manage the current low price lev-
els in the best possible manner.
carry-over sunflower stock could
be in excess of 180 000 tons for
the marketing year. However, con-
flicting feedback is being received
on the sunflower yields realising.
Disappointing yields are reported
by some while others report excel-
lent yields. The current sunflower
price is significantly lower than
the soybean price and sunflower is
being pressed at good margins. It
is hoped that sunflower carry-over
stocks will be used up in this man-
ner and that prices will recover.
The sunflower price on the JSE is
lower than the calculated derived
export parity level. Due to the fact
that sunflower is normally sold
by producers immediately, the
so-called harvest pressure being
Oilseeds complex
SUNFLOWER AND SOYBEANS
According to the first crop esti-
mate of the NCEC, the calculated
Table 1: The calculated import parity of South African white maize to Southeast
Asia.
Maize origin: Randfontein Load cost advantage USA-$11
Delivery point: Southeast Asia Basis CBT to FOB($/t) $22
Date: 24 March 2017 Quality premium:
$5
USA CBT yellow maize price ($/bu)
Exchange
rate
R/$
3,40 3,50 3,60
3,70
3,80
4,00
4,20
12,00 R1 571 R1 618 R1 666 R1 713 R1 760 R1 855 R1 949 R2 044
12,50 R1 657 R1 706 R1 756 R1 805 R1 854 R1 952 R2 051 R2 149
13,00 R1 743 R1 794 R1 845 R1 897 R1 948 R2 050 R2 152 R2 255
13,25 R1 786 R1 838 R1 890 R1 943 R1 995 R2 099 R2 203 R2 308
13,50 R1 829 R1 822 R1 935 R1 988 R2 042 R2 148 R2 254 R2 360
14,00 R1 915 R1 970 R2 025 R2 080 R2 135 R2 246 R2 356 R2 466
14,50 R2 001 R2 058 R2 115 R2 172 R2 229 R2 343 R2 458 R2 572
Graph 5. The long term seasonal price trend of the sunflower (Spot price) on
Safex.
48
APRIL/MAY 2017 • SENWES Scenario
4,40
experienced is worse than in the
case of maize.
Graph 5 indicates the seasonal
price trend in respect of sunflower.
Sunflower prices usually decrease
from mid-January and usually
recover from mid-May. This year’s
decline started by mid-October
2016 and is still continuing.
Expectations are that the declining
trend will continue until mid-May.
The same price trend is noticed
in respect of soybeans. The NCEC
predicts a crop of 1,07 million
tons. The supply and demand for
sunflower are reasonably balanced,
but despite this the price decreased
sharply, as in the case of sunflower.
The soybean price decrease started
later than that of sunflower, name-
ly from mid-January 2017. This
decline is expected to continue
until the end of April 2017, in line
with the long-term seasonal trend.
Producers should keep in contact
with their grain marketing advisors
as far as soybeans are concerned as
well.
SUMMARY AND CONCLUSION
Price levels of all summer crops
are under pressure at present. Price
levels are below the calculated pro-
duction costs in many instances,
particularly in respect of maize.
Exports will have to take place
before the maize price will recover.
The exchange rate, which is total-
ly unpredictable, could have an
impact on the price. The question
is, in which direction?
Although miracles can not be
brought about in respect of mar-
keting, the producer should stay
in touch with his grain marketing
advisor. The necessary planning
can be done to address the low
price situation in the best possible
manner.