SA grain prices firm amid weakening rand


SA grain prices firm amid weakening rand

THE SouthernTIMES Mar 20, 2018

    Johannesburg – Prices of the staple maize have rebounded strongly on the Johannesburg Stock Exchange owing to the volatile South African rand receding, coupled with strong international prices.  

    The rand has been weakening owing to local and global issues, including the United States President Donald Trump’s pledge to impose tariffs of between 10 percent and 25 percent on some imports.

    At the beginning of the week (Monday), yellow maize prices were moderately higher across the board but still below the R2,000 per tonne (about US$168) level.

    According to Unigrain, the South African maize prices started Monday higher but the buying interest faded and the market pulled lower after that.

    White maize opened the day at R1,995 and traded to a high of R2,005 and prices sold off after that.

    The market broke below the 40-day average and sold off after that trading to an intraday low of R1,956 ending the day close to the session low.

    “The late selling and weak close that was seen could weigh on our market in the sessions ahead,” Unigrain stated.

    Paul Makube, the agricultural economist for First National Bank, pointed out the National Crop Estimates Committee’s report was however a bit bearish for the maize market with the first production estimate surprising on the upside at 12.22 million tonnes but still down 27.3 percent year-on-year.

    This comprised of 49.97 percent white maize and 50 percent yellow maize.

    Weekly trade data meanwhile showed that wheat imports fell by almost 30 percent week-on-week to 68,453 tonnes during last week, which brought the total for the season to date to 992,306 tonnes.

    The main suppliers of last week’s consignment were Germany (87.8 percent) Latvia (9.1 percent), and Argentina (3.1 percent).

    South African wheat contracts opened the week higher but the early gains were short-lived and prices sold off afterwards.

    Wheat contracts opened the week at R3,720 which was also the intraday high of the session with the market coming under some more pressure subsequently.

    The market sold off after that trading to an intraday low of R3,670 and the market ended the day close to the session low.

    “Our wheat market sold off in the session on Friday but the weaker rand seen on Monday morning could provide some support to local wheat prices,” Unigrain stated.

    On the oilseed market, improved domestic production conditions continued to weigh heavily, which saw sunflower prices easing lower while soybeans move sideways.

    The weaker rand however helped limit losses.

    South Africa’s crop estimate came in at 731,505 tonnes for sunflower which is a 16 percent drop from last season.

    The decline in production is largely due to the reduction in planted area.

    The expected soybean crop, however, showed a 4.5 percent increase y/y at 1.374 million tonnes, which will be the new record given last year’s massive 1.32 million tonnes.

    “This is good given the increased processing capacity and strong demand,” Makube said.

    Unigrain reported that South African soybean contracts opened the week slightly higher at R4,756. The market surged to a high of R4,839 and ended the day slightly off the session highs. Immediate resistance is seen at the 100-day average seen at R4,857. – CAJ News


Order this cartoon



You are commenting as guest.Register Now. Already registered? Sign in Now