MARKETS
Grain market prospects
Article written : 13 March 2018
Harvest time is approaching and the producer focus is shifting from the production of grain to the marketing thereof . The reality of low prices against the background of more than adequate stock levels , emphasises the importance of the right marketing decisions .
By Hansie Swanepoel Senwes Grainlink Market Analist
Since there is a significant period between the writing and publication of this type of article , it becomes almost impossible to present an appropriate scenario analysis which can assist producers with the facilitation of a marketing decision . It is therefore merely aimed at providing a macro-economic overview of the most important price drivers .
EXCHANGE RATE Changes in the R /$ exchange rate have a significant impact on local grain prices . The rand is strengthening over the longer term - there are no indications at present that this trend is changing . Significant strengthening is not expected - stability around the R12 /$ level can be expected .
INTERNATIONAL MARKETS The international market is in a time of finalisation of crops in the Southern Hemisphere , while the crops in the Northern Hemisphere are being planted . The most important role players are production in South America in the south and the USA in the north .
South America Brazil experienced a good production season , with crops close to the record levels of last year . The large crops in Brazil are , however , played down partially by a significantly smaller crop in Argentina .
Figure 1 : R /$ graph Soure : Reuters
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SENWES SCENARIO | AUTUMN 2018