good yields although some grading problems were experienced. In
Caledon, Krige, Rietpoel and Klipdale the rain during harvest time caused
grading problems mainly due to the falling number and sprouting.
The wheat however did surprisingly well as compared to what was
expected. Producers in Bredasdorp and Mossel Bay finished harvesting
before any rainfall occurred; good wheat yields and grades were
achieved. In the Eastern Free State, rains were good for the summer
crops although it had a negative impact on the winter crops which led to
producers harvesting low quality wheat.
Parity prices
Graph 2
show prices for old season white maize, Safex maize prices
showed a huge increase during the December holidays for the old season
crop. Much of this increase was due to the increasing demand from the
African countries, weakening of the exchange rate as well as tight old
stocks. White maize prices are currently trading at R3 018/ton which is
12% higher compared to price levels seen 17 December last year.
South Africa has already exported about 145 996 tons of white maize to
Zimbabwe. Indicators show that production conditions in Zimbabwe are
poor and that more imports are needed. Zambia does not have sufficient
maize for exports to Zimbabwe.
Graph 3
and
Graph 4
show prices of new season white and yellow
maize. White maize prices for delivery in July are currently trading at
R2 449/ton which is 18% higher compared to price levels seen
17 December last year. Yellow maize prices for delivery in July are
currently trading at R2 356/ton which is 13% higher compared to price
levels seen 17 December last year.
New season prices are supported by prospects of tight stocks as well as
uncertain weather conditions in the western producing areas.
Producers should take note that the weak rand value supports the
domestic price levels of maize. Furthermore, beware that South America
starts harvesting soybean in March, which may put international
commodity prices under pressure.
The USA HRW prices are currently at normal price levels, which may
lead to the triggering of the South African wheat tariff if prices decline
further.
Further reading
United States Department of Agriculture, 2014. World agricultural supply and demand
estimate. USDA. Washington.
International Grain Council, 2014. Grain market indicators. IGC. London.
Grain SA, 2014. Industry service: Market reports. Grain SA. Pretoria.
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