Market overview
Markets
An overview of summer grains
and oilseeds
WANDILE SIHLOBO AND FUNZANI SUNDANI, BOTH ECONOMIST’S AT INDUSTRY
SERVICES, GRAIN SA AND WESSEL LEMMER, SENIOR ECONOMIST, INDUSTRY
SERVICES, GRAIN SA
Over the past month, there have been a lot of price movements on the
international and domestic markets; with increasing food demand also
observed in Africa. This article will briefly focus on the international grain
and oilseeds markets as well as the domestic market situation.
International markets
On the international front, there is an expected recovery in grain
production mainly due to favourable weather conditions in key producing
countries, particularly in the US and the CIS countries. Furthermore, the
International Grains Council (IGC) (2013) noted an expected increase of
8% in production, compared to the previous year’s low levels.
Maize
The 2013/2014 maize production forecast has been revised to 943 million
tons, 9% higher than last year’s figures (
Graph 1
) (IGC, 2013). Harvests
are underway in the US with better than expected yields. The Ukraine is
also expected to have a large maize crop, with projections at 28 million
tons. This has led to some pressure in maize prices, to -36% lower for
July 2014 delivery compared to a year earlier (
Table 1
). Recent dry
conditions in South America have led to planting delays, which have led
to declines in the expected maize production forecasts (IGC, 2013).
Soybeans
For 2013/2014, the soybean production forecast is also expected to rise
by 4% as compared to the previous year, with the production estimate
now at 280 million tons, due to better than expected yields from
the US as well as South America. Brazil’s 2013/2014 soybean production
is forecasted at around 88 million tons as compared to 81,6 million tons
the previous year (IGC, 2013). The prices for May 2014 delivery is -7%
lower than a year ago (Table 1).
Wheat
The 2013/2014 wheat production forecast has been cut in the
Commonwealth of Independent States (CIS) countries, particularly in
Russia and the Ukraine, due to unfavourable weather conditions which
caused harvest delays as well as winter plantings delays.
81
November 2013
– 16 October 2013
Unit
Oct 2013
Change (%)
Oct 2012
CBOT maize July 2014
c/bu
472,25
-0,36
644,00
JSE yellow maize July 2014
R/ton
1 977,00
-0,10
2 175,00
JSE white maize July 2014
R/ton
2 026,00
-0,07
2 175,00
CBOT soybean May 2014
c/bu
1 274,00
-0,07
1 329,50
JSE soybean May 2014
R/ton
5 000,00
NA
NA
CBOT wheat December 2013
c/bu
648,75
-0,24
846,75
JSE wheat December 2013
R/ton
3 464,00
-0,02
3 517,00
Sunflower oil Black Sea
$/ton
875,00
-0,30
1 136,00
JSE sunflower spot price
R/ton
5 300,00
-0,09
5 770,00
Exchange rate
R/$
9,96
-0,12
8,80
Crude oil
$/barrel
109,46
0,07
114,46
Average maize dryland production costs
R/ton
7 548,00
0,07
8 073,00
TABLE 1: PRICE COMPARISON (YEAR-ON-YEAR).
Figure 1: Countries requiring external food assistance.
Source: (FAO, 2013)
Continued on page 82
