GRAIN MARKET PROSPECTS •••
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Graph 1 . The March 2017 white maize contract movement on JSE / Safex .
Graph 2 . The price movement of the July 2017 contract on the JSE / Safex .
Graph 3 . Price movement of the white and yellow maize March 2017 contract on the JSE / Safex .
maize delivered at Randfontein by January 2016 . Negotiations were held with the Department of Agriculture to import genetically modified white maize from the USA and during April 2016 GM-free maize was imported from the USA . This maize was also expensive due to a premium of up to $ 45 per ton which had to be paid for GM-free American white maize .
Approval was eventually obtained and the first GM white maize arrived in South African by December 2016 . The rumours that American GM white maize could be imported , resulted in a decrease in the white maize price to the calculated import parity level of imported American GM white maize . This started happening in October 2016 . In addition the rand strengthened , which had a further negative impact on the price . Grain traders and processors started making calculations and were of the opinion that South African would get through to the new marketing year with the existing carry-over stock without any problems such as shortages . It also started to rain in December 2016 and the market is of the opinion that a large crop can be expected .
Graph 1 reflects the March 2017 price movement of white maize on Safex . The March 2016 white maize price decreased by approximately R1 200 since November 2016 . Traders and speculators had to liquidate their positions in respect of March 2017 , which deceased the price even further .
Graph 2 reflects the market ' s view in respect of new season white maize . It is the white maize July 2017 contract price movement . The white maize price decreased by more than R800 per ton since mid-December 2016 . The decrease came after the good rain over the largest part of the summer rainfall area . The prediction of a La Niña episode also placed pressure on the price . Calculations indicated that a surplus of white maize would be produced , which would either have to be exported or used in the animal feed market . This resulted in the white maize price decreasing to the calculated Randfontein export parity price . The only aspect which would bring about a turnaround in the price would be no further rain this season , which is improbable .
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