MARKETS
Figure 2: Production in South America.
Argentina and Brazil are the strongest
competition for our domestic maize in the
export market. Local prices will therefore
be compared with South American prices
in order to ensure profitable exports.
The USA is entering a period during which
producers will have to make a choice
between planting maize or soybeans.
With maize plantings being less profitable
than soybean plantings at present, expec-
tations are that USA maize prices will
USA
Table 1: Local supply and demand figures
V&A
Production
Crop estimate
Estimate for 2018/19
WM YM Total
6 108 000 6 114 950 12 222 950
Grain held back 200 000 350 000 550 000
Less early deliveries 200 000 350 000 550 000
Plus early deliveries 200 000 350 000 550 000
5 908 000 5 764 950 11 672 950
Opening stock 2 805 286 1 418 159 4 223 445
Producer deliveries
Available for domestic market
Supply
5 908 000 5 764 950 11 672 950
Imports - - -
Net early deliveries - - -
12 000 18 000 30 000
8 725 286 7 201 109 15 926 395
6 494 000 3 888 000 10 382 000
67 000 260 000 327 000
6 561 000 4 148 000 10 709 000
560 000 1 620 000 2 180 000
Total demand 7 121 000 5 768 000 12 889 000
Closing stock 1 604 286 1 433 109 3 037 395
Stock-to-usage 24.45% 34.55% 28.36%
2.96 4.42 3.51
90 135 107
Surplus
Total supply
Demand
Processed for domestic market
Sundry demand
Domestic demand
Exports
Months with available stock
Days with available stock
remain higher relative to soybean prices.
In addition the USA is not kicking off the
planting season on a good note - large
areas in the production area are classified
as drought areas and rain will have to be
received for planting to commence.
Local conditions
The most important characteristic of the
local market is the surplus stock carried
over from the 2017/18 season. This will
probably result in prices trading close to
export parity levels. Any price support will
probably come from a weaker exchange
rate or increasing international prices
since both these factors have a material
influence on parity prices.
SUMMARY
Local prices will probably continue to
reflect a sideways trend, with prices
trading around export parity levels. Even
with exports of almost 2,2 million tons,
carry-over stock levels of around 3 million
tons can be expected by the end of April
2019. However, interim price increases
could occur as a result of higher inter-
national prices or a weaker exchange
rate. These opportunities can and must
be utlised in order to do the most optimal
marketing possible.
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SENWES SCENARIO | AUTUMN 2018
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