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GRAIN MARKET PROSPECTS
July and August 2017 > CONTINUED FROM PAGE 43
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WINTER GRAIN : WHEAT The wheat price for the far months , namely December 2017 , decreased significantly on the JSE , the changes in the calculation of the wheat import tariff and the increase in the international wheat price being the main reasons . Expectations are that the wheat tariff may decrease further as international wheat prices increase . Visit the SAGIS website for a comprehensive explanation of the calculation of the wheat import tariff .
One of the variables in the calculation is the American hard winter wheat export quotation to the Gulf . Due to dry conditions in various wheat producing areas in the world , the Gulf export quotation of American Hard Winter Wheat ( HRW ) increases . The higher the HRW Gulf export quotation , the lower the calculated wheat import tariff to South Africa . It is sad that , although the calculation of the wheat import tariff is based on American GRW , cheaper Black Sea wheat and European Union wheat are mostly imported .
Oilseed complex :
SUNFLOWER AND SOYA BEANS
The sunflower and soya bean cash price movements are illustrated in the next graph . Both sunflower and soya bean prices trade below the calculated derived import parity of the two commodities . The prices of the two commodities usually decrease significantly during the harvesting process . Producers are inclined to sell the two commodities as they harvest , being the reason for the price decrease . According to the NAMC there will be no need
AUG / SEP 2017 • SENWES Scenario
Graph 4 . The December wheat price movement on the JSE .
Graph 5 . The cash price for sunflower and soya beans on the JSE with derived prices of both commodities ( Grain SA ).
to import any of the two commodities this season . According to the NAMC calculations , approximately 30 000 tons of soya beans will have to be exported . The weakening of the rand and the increase in the international soya bean price also supported the JSE prices of the two commodities . According to Grain SA ' s calculations , sunflower and soya bean prices form at the calculated export parity level , Randfontein delivery . Expectations are that the price could move to the calculated export parity level and even closer to the calculated derived import parity level . There is no reason for large processors to have large stock levels , since it puts pressure on prices .
The producer should stay in contact with his grain marketing advisor in respect of oilseeds .
SUMMARY AND CONCLUSION : The large summer grain crop in South Africa will result in high carry-over stock levels . The maize price has decreased to calculated export parity level . All eyes are on exports to decrease the high carry-over stock levels . In respect of white maize there is some concern as to whether significant exports will materialise . Contact your local grain procurer to assist you with the grain marketing process .