••••
GRAIN MARKET PROSPECTS
July and August 2017 : Market movements
THYS GROBBELAAR SENIOR GRAIN ANALYST , SENWES GRAINLINK
Article written : 07 July 2017
42
THE OBJECTIVE OF THIS ARTI- CLE IS TO PROVIDE A BROAD MARKET OVERVIEW OF THE MOST IMPORTANT GRAINS AND OILSEEDS , SINCE THERE IS A SIG- NIFICANT TIME LAPSE BETWEEN THE WRITING AND PUBLICATION OF THE ARTICLE .
Price drivers in the grain and oilseeds markets
INTERNATIONAL FUNDAMENTAL FACTORS Exchange rate movements As discussed in previous articles , the rand / dollar exchange rate has the biggest correlation of all the variables impacting on South African commodity prices . Political movements , particularly in the financial market in South Africa , resulted in huge fluctuations in the rand / dollar exchange rate . The next graph indicates that the South African white maize price and the rand / dollar exchange rate are closely related . When the rand / dollar exchange rate declines , the South African maize price on the JSE increases . South African commodity prices form at a level of the calculated import parity or export parity of between the two levels , depending on the situation in respect of the calculated carry-over stock of the commodity concerned . Should the price of the commodity stabilise at the relevant parity price , depending on the
AUG / SEP 2017 • SENWES Scenario
Graph 1 . A comparison between the JSE white maize price and the R /$ exchange rate .
Graph 2 . The relationship between the JSE white maize price and the CBT yellow maize price .
calculated carry-over levels , the exchange rate will play the largest role in the price forming process .
This trend is evident in the first graph .
All eyes are always on the price movements of American yellow corn on CBOT . The price movements of white maize on the JSE and yellow maize on the CBOT since April 2016 are indicated in the same graph . It is evident that there is not a strong relationship between the two commodity prices . The American yellow corn price increased fairly consistently since September 2016 , while the JSE white maize price decreased consistently for the corresponding period . At this stage the
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G RAI N M AR K E T P R O S P E C T S
July and August 2017:
Market movements
THYS GROBBELAAR
SENIOR GRAIN ANALYST, SENWES GRAINLINK
Article written: 07 July 2017
THE OBJECTIVE OF THIS ARTI-
CLE IS TO PROVIDE A BROAD
MARKET OVERVIEW OF THE
MOST IMPORTANT GRAINS AND
OILSEEDS, SINCE THERE IS A SIG-
NIFICANT TIME LAPSE BETWEEN
THE WRITING AND PUBLICATION
OF THE ARTICLE.
Price drivers in the grain
and oilseeds markets
INTERNATIONAL
FUNDAMENTAL FACTORS
Exchange rate movements
As discussed in previous articles,
the rand/dollar exchange rate
has the biggest correlation of
all the variables impacting on
South African commodity prices.
Political movements, particularly
in the financial market in South
Africa, resulted in huge fluctua-
tions in the rand/dollar exchange
rate. The next graph indicates that
the South African white maize
price and the rand/dollar exchange
rate are closely related. When the
rand/dollar exchange rate declines,
the South African maize price on
the JSE increases. South African
commodity prices form at a level
of the calculated import parity or
export parity of between the two
levels, depending on the situation
in respect of the calculated car-
ry-over stock of the commodity
concerned. Should the price of the
commodity stabilise at the relevant
parity price, depending on the
42
Graph 1. A comparison between the JSE white maize price and the R/$ exchange rate.
Graph 2. The relationship between the JSE white maize price and the CBT yellow
maize price.
calculated carry-over levels, the
exchange rate will play the largest
role in the price forming process.
This trend is evident in the first
graph.
All eyes are always on the price
movements of American yellow
corn on CBOT. The price move-
ments of white maize on the JSE
and yellow maize on the CBOT
AUG/SEP 2017 • SENWES Scenario
since April 2016 are indicated in
the same graph. It is evident that
there is not a strong relationship
between the two commodity
prices. The American yellow corn
price increased fairly consistently
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