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GRAIN MARKET PROSPECTS
May and June 2017 : Market movements
THYS GROBBELAAR SENIOR GRAIN ANALYST , SENWES GRAINLINK
Article written : 12 May 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 .
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Price drivers in the grain and oilseeds markets
INTERNATIONAL FUNDAMENTAL FACTORS Exchange rate movements The rand / dollar exchange rate has the most significant correlation of all the variables which impact the South African commodity prices . Political developments , particularly on the financial side , resulted in an unstable rand / dollar exchange rate lately . This trend is reflected in the graph below . A one cent weakening of the rand against the dollar , can result in a calculated weakening of R1.41 per ton in respect of the South African white maize price . For the period 23 March 2017 to 10 April 2017 , the rand weakened by R1.49 against the dollar , which resulted in a calculated increase of R210 in the white maize price . The white maize price actually increased by R339 per ton for the period referred to . The American corn price increased by 10 cents per bushel for the said period . This
JUN / JUL 2017 • SENWES Scenario
Graph 1 . The R /$ -exchange rate movement
Graph 2 . Die langtermyn spotprys ( in c / bu ) van geelmielies oor ' n seisoen op Chicago Board of Trade teenoor die 2017 / 18-prys .
variable has a significant impact on commodity prices , but is not easy to predict .
International commodity prices Large carry-over stocks and relative good growing conditions in large parts of the world , place quite a lot of pressure on the international price of maize , wheat and soy-beans . The following graph reflects the movement of yellow corn for the season on the Chicago Futures Exchange . Graph 2 reflects a fairly significant sideways movement . The American corn price decreased over the past three seasons . The relatively low American yellow corn price is , however , putting pressure on the South African white and yellow maize prices .