Agri-Weeklywebapps.daff.gov.za/AmisAdmin/upload/30 Sep 2016.pdf · FNB Agri-Weekly Page 2 Domestic:...
Transcript of Agri-Weeklywebapps.daff.gov.za/AmisAdmin/upload/30 Sep 2016.pdf · FNB Agri-Weekly Page 2 Domestic:...
Agri-Weekly
30 September 2016
Yellow maize market (Graph 1)
International:
US maize prices ended in negative territory under
pressure due to the favourable harvest weather and
good crop ratings of 74% in the good to excellent
category. Harvest progress was however still behind
last year at 15% complete. In its latest report of 29 September 2016, the
International Grain Council still projected a record
global grain crop for 2016/17 at 2.03 million tons
which is unchanged m/m. Over half of this is maize,
whose estimate was lowered slightly from August but
still at a record high of 1.03 million tons. Dry weather
conditions in parts of the European Union (EU) and China were cited as reasons for the downward
revision of the estimate. Meanwhile, China has reportedly given approval to two companies to export up to 2 million tons of maize
in an effort to reduce some of its surplus. This combined with an already record global supply outlook will
continue to weigh heavily on international prices. The livestock sector, especially the intensive production
systems such as poultry, pork and feedlots will be the major beneficiaries in terms of reduced cost of
feeding. In the weekly ethanol update, the US Energy Information Agency (EIA) showed that ethanol production
was up 8,000 barrels per day for the week ended 23 September 2016. Ethanol stocks were up 600,000
barrels at 20.6 million barrels. Ethanol stocks and price trends are important as maize is a major feedstock
in ethanol production in the US.
Source: USDA, PSD
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Graph 1a: World maize production trends (‘000 tons)
0%
5%
10%
15%
20%
25%
30%
35%
0
50,000
100,000
150,000
200,000
250,000
Graph 1b: World maize- Ending Stocks vs Stocks/Usage ratio
Ending Stocks Stocks/Usage ratio
Graph 1: Yellow maize prices
750
1,070
1,390
1,710
2,030
2,350
2,670
2,990
3,310
3,630
3,950
4,270
02-Oct -15 05-Feb-16 10-Jun-16 14-Oct -16
(R/ton)
Import parity Export parity Domestic
* last two data points are preliminary
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FNB Agri-Weekly Page 2
Domestic:
It was another week of sharp losses on the maize market due to the combined influence of a resurgent
rand, seasonal harvest pressure and the upward revision of the current season crop.
The average weekly YMAZ prices dropped by 3.4% w/w but still 3% higher y/y at R3,002/t. Prices have so
far fallen by R1,020/t from the 2016 peak of R4,021/t earlier in January.
Early in the week, the Crop Estimate Committee report showed an upward revision of its yellow maize
crop by 2% to 4.3m tons, although remaining below last year’s 5.2m tons. The total maize crop estimate
was raised 3.3% from the previous estimate to 7.54m tons.
Weekly producer deliveries came in at relatively lower with overall volumes at 40,344 tons with yellow
maize at 12,310 tons. Cumulative season to date deliveries were reported at 6.2m tons.
The latest trade data was bullish with yellow maize imports reported at 60,113 tons, which is slightly higher
w/w. Exports however slowed to 4,171 tons, down 25% w/w.
Source: JSE, Own Calculations
SAFEX (Rand/ ton) CME (US$/t)
30 September 2016 WMAZ % w/w YMAZ % w/w CBOT Corn % w/w US CORN % w/w
Weekly Avg R 3,615 -5.6% R 3,002 -3.4% R 1,803 -2.8% 146.3 -2.3%
Dec-2016 R 3,593 -7.3% R 3,066 -1.6% R 1,818 0.3% 132.62 0.1%
Mar-2017 R 3,542 -3.7% R 3,041 -1.6% R 1,909 0.7% 136.48 0.1%
May-2017 R 3,009 1.9% R 2,655 0.2% R 1,964 -0.4% 139.24 0.2%
Jul-2017 R 2,819 0.2% R 2,626 0.6% - - 141.92 0.2%
Sep-2017 - - - - - - 144.60 0.2% Source: JSE, CME
OUTLOOK
We are entering a period in which weather will become a major price driver for the local market. With
planting period fast approaching, rains are needed to ensure good soil moisture for crop emergence.
Globally, the abundant supplies will continue to exert downward pressure on prices.
-400-340-280-220-160-100
-402080
140200260320
Graph 1c: Weekly YMAZ price change (R/ton) Last 5 months
2300
2400
2500
2600
2700
2800
2900
3000
3100
3200
3300Graph 1d: JSE YMAZ Futures, Jul-17 (R/t)
0
10,000
20,000
30,000
40,000
MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR
Graph 1e: Monthly Yellow Maize Export Trends Marketing Seasons, (tons)
2015/16 2016/17
0
20,000
40,000
60,000
80,000
MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR
Graph 1f: Total SA Maize Export Trends Marketing Seasons, (tons)
2015/16 2016/17
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FNB Agri-Weekly Page 3
Source: SAGIS;
30 September 2016 Calculated Yellow Maize Options prices (R/ton) RMB commodity desk (Tel: 011 269 9005)
Dec-16 Mar-17 May-17
Ask Put Call Ask Put Call Ask Put Call
3,100 346 312 3,080 322 283 2,700 309 264
3,060 324 330 3,040 300 301 2,660 286 281
3,020 302 348 3,000 278 319 2,620 264 299
White maize market trends (Graph 2)
International: As with their yellow counterparts, US white maize
prices lost ground on advancing harvest and better crop ratings.
US white maize reversed last week’s gains and shed 1.8% over the week at US$136/ton, which is 9% lower compared to last year.
Domestic:
Weekly white maize prices posted the biggest
losses on large import volumes, the slightly firmer
rand and the improved supply outlook from the
CEC report.
The CEC raised its estimate of the national white
maize crop by 5% from last month to 3.3m tons,
which weighed heavily on the market.
White maize prices averaged R3,615 per ton, down 5.6% w/w but 14% higher y/y. Prices have so far shed
a whopping R1,547/t from the 2016 peak of R5,162/t.
After a brief hiatus, maize imports resumed with 15,686 tons from Mexico arrived at the domestic ports,
with the year to date reaching 330,634 tons. Exports recovered slightly from last week at 13,225 tons, and
the cumulative year to date at 202,995 tons.
OUTLOOK
We are entering a period in which weather will become a major price driver for the local market. With
planting period fast approaching, rains are needed to ensure good soil moisture for crop emergence.
Globally, the abundant supplies will continue to exert downward pressure on prices.
30 September 2016 Calculated White Maize Options prices (R/ton) RMB commodity desk (Tel: 011 269 9005)
Dec-16 Mar-17 May-17
3,640 555 508 3,580 586 548 3,040 495 464
3,600 531 524 3,540 563 565 3,000 471 480
3,560 509 542 3,500 540 582 2,960 448 497
0
100,000
200,000
300,000
400,000
500,000
MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR
Graph 1g: Monthly Yellow Maize Import Trends (tons) Marketing Season
2015/16 2016/17
0
100,000
200,000
300,000
400,000
500,000
MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR
Graph 1h: Total Monthly SA Maize Imports (tons) Marketing Season
YM 2016/17 WM 2016/17 YM 2015/16 WM 2015/16
Graph 2: White maize prices
680
1,160
1,640
2,120
2,600
3,080
3,560
4,040
4,520
5,000
5,480
02-Oct-15 05-Feb-16 10-Jun-16 14-Oct-16
Impo rt parit y Expo rt parit y D omest ic
(R/ton)
* last two data points are
preliminary
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FNB Agri-Weekly Page 4
Source: JSE, Own Calculations
Source: SAGIS;
Wheat market trends (Graph 3) International:
US prices moved sideways to weaker on upward
revisions of the global crop while the stronger US
dollar and quality concerns in Australia helped limit
losses.
The IGC raised its global wheat crop estimate by
4m tons to 747 million tons.
Elsewhere, in Russia where current season crop is
estimated at record highs, planting for the winter
wheat is reportedly advancing rapidly 64%
complete.
In Australia, heavy rains are threatening the size
and quality of the wheat crop. This is of much
concern as it is major supplier high protein wheat. Given the reported quality issues in France as well, the
supply outlook for the good quality milling wheat is tight.
Due to low local supplies of wheat in India, the government of India has reportedly dropped the wheat
import tariff from 25% to 10% to curb the strong rally in domestic food prices following a drought season.
-300-240-180-120
-600
60120180240300360420
Graph 2a: Weekly price change (R/ton) - JSE WMAZ
2300
2500
2700
2900
3100
3300
Graph 2b: JSE WMAZ Futures, Jul-17 (R/t)
0
20,000
40,000
60,000
MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR
Graph 2c: Monthly White Maize Export Trends (tons) Marketing Seasons
2016/17 2015/16
0
20,000
40,000
60,000
80,000
MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR
Graph 2d: Total SA Maize Export Trends Marketing Seasons, (tons)
2015/16 2016/17
0
50,000
100,000
150,000
MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR
Graph 2e: Monthly White Maize Import Trends (tons) Marketing Season
2015/16 2016/17 Cumulative
0
100,000
200,000
300,000
400,000
500,000
MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR
Graph 2f: Total Monthly SA Maize Imports (tons) Marketing Season
YM 2016/17 WM 2016/17
Graph 3: Wheat price trends
500
940
1,380
1,820
2,260
2,700
3,140
3,580
4,020
4,460
4,900
5,340
02-Oct-15 05-Feb-16 10-Jun-16 14-Oct-16
Import parit y Export parit y D omest ic
(R/ton)
* last two data points are preliminary
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FNB Agri-Weekly Page 5
R 4,545
R 5,120
R 4,705 R 4,240
3860
4060
4260
4460
4660
4860
5060
5260
5460
05-F
eb-1
6
19-F
eb-1
6
04-M
ar-1
6
18-M
ar-1
6
01-A
pr-
16
15-A
pr-
16
29-A
pr-
16
13-M
ay-…
27-M
ay-…
10-J
un
-16
24-J
un
-16
08-J
ul-
16
22-J
ul-
16
05-A
ug-
16
19-A
ug-
16
02-S
ep-1
6
16-S
ep-1
6
30-S
ep-1
6
Graph 3d: JSE WHEAT Futures - (R/t)
-300-240-180-120
-600
60120180240300360420
Graph 3c: Weekly JSE Wheat price change (R/ton)
Source: USDA, PSD
Domestic:
Wheat prices on the JSE surprised on the upside despite weakness on the international front and further
rand gains.
The CEC made an upward revision to area estimate for wheat by 10,000ha to 505,150 hectares. The
second production estimate was thus revised higher by 1% to 1.7 million tons.
The weather outlook for the wheat areas has improved and will boost crop prospects. The wheat crop is
reportedly in good conditions so far.
Trade data was also bullish with imports reported at 51,141 tons, bringing the total for the 2015/16
marketing season to 2.03 million tons which is slightly ahead of earlier projections of 2 million tons.
Nonetheless, no exports were reported for the week.
Wheat prices averaged R4,181 per ton, up1.6% w/w and1.9% y/y.
OUTLOOK
Quality will be the main driver of prices internationally as crop ratings in key export markets indicate
increased variability. On the domestic front, the currency should cushion downside risks stemming from
abundant global supplies.
Source: JSE
30 September 2016 JSE WHEAT
(R/t) % w/w US HRW (US$/t) % w/w US SRW (US$/t) % w/w
Weekly average R 4,181 1.6% 153.57 -0.3% 157.52 -1.0%
Dec-2016 R 4,156 -1.0% 152.63 -1.4% 147.71 -0.6%
Mar-2017 R 4,246 -0.8% 158.73 -1.4% 156.01 -0.8%
May-2017 R 4,257 -1.5% 162.55 -1.3% 160.93 -0.8%
Jul-2017 - - 166.23 -1.1% 164.39 -0.6%
Sep-2017 - - 171.59 -0.8% 169.61 -0.2% Source: JSE, USDA, CME
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Graph 3a: World wheat production trends (‘000 tons)
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
50,000
100,000
150,000
200,000
250,000
300,000
Graph 3b: World wheat: Ending Stocks vs Stocks/Usage ratio
Ending Stocks Stocks/Usage ratio
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FNB Agri-Weekly Page 6
30 September 2016 Calculated Wheat Option prices (R/ton) RMB commodity desk (Tel: 011 269 9005)
Sep-16 Dec-16 Mar-17
Ask Put Call Ask Put Call Ask Put Call
4,240 418 376 4,320 456 415 4,360 483 444
4,200 395 393 4,280 433 432 4,320 461 462
4,160 374 412 4,240 411 450 4,280 439 480
Source: SAGIS;
Oilseed market trends (Graph 4)
International:
The increased harvest pace, reports of better
yields and a generally large crop kept prices in
the US soybean complex under pressure.
US harvest was reported at 10% complete,
though still lagging last year’s pace due to rain
induced harvest delays. Ratings remained
steady at 73% in the good to excellent category.
US weekly export sales came in at 1.6m tons,
all for the marketing year 2016/17. Due to
abundant global supplies, focus has now turned
to quality and the US soybean is by far the
highly sort.
On the back of higher yield expectations for the US, the IGC projected the 2016/17 global soybean
production up 4m tons from the previous estimate to 329 million tons, which is 4% higher y/y.
As indicated earlier in the maize commentary, the higher grain and soybean output will benefit the
livestock sector in terms of lower feed costs.
Meanwhile, planting is reportedly underway in Brazil with progress at almost 2% of complete.
Source: USDA, WASDE, PSD
-
80,000
160,000
240,000
320,000
400,000
480,000
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
Graph 3e: Wheat Import Trends (tons) Marketing Season
2013/14 2014/15 2015/16
0
10000
20000
30000
40000
0
80000
160000
240000
320000
400000
480000
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
Graph 3f: Wheat Import & Export Trends (tons) Marketing Season
IMP-2014/15 IMP-2015/16, RHSEXP-2014/15 EXP-2015/16, RHS
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000Graph 4a: World soybean production trends (‘000 tons)
0%
5%
10%
15%
20%
25%
30%
0
20,000
40,000
60,000
80,000
100,000
Graph 4b: World soybean: Ending Stocks vs Stocks/Usage ratio
Ending Stocks Stocks/Usage ratio
Graph 4: Derived Oilseed prices
3,480
3,920
4,360
4,800
5,240
5,680
6,120
6,560
7,000
7,440
7,880
02-Oct-15 05-Feb-16 10-Jun-16 14-Oct-16
Derived Soya Derived Sunflower
Sunflower-spot Soya-spot
(R/ton)
* last two data points are preliminary
____________________________________________________________________________________________________________________________________________
FNB Agri-Weekly Page 7
Domestic:
Oilseed prices weakened due on spill over losses from the international market coupled with further rand
gains.
Soybean prices shed 2.7% over the week and averaged R6,140/ton, but still 12% higher y/y. The overall
soybean crop for 2015/16 was revised down by 1.2% m/m to 741,550 tons, which is well below the 1m
tons attained last year.
Sunflower prices were down 1.3% w/w and 3% y/y at R6,170/ ton. The local sunflower crop estimated was
revised higher to 755,000 tons, up 13% y/y.
OUTLOOK
The bullish global supply outlook will continue to limit further upside for prices in the oilseed complex.
The renewed rand gains will continue to exert downward pressure on local prices. However, weather will
become a critical factor for price direction in the medium term as we head in to the planting season.
Source: JSE
30 September 2016
JSE SUNS (R/t) % w/w
JSE SOYA (R/t) % w/w
US SOYA (US$/t) % w/w
Weekly avg R 6,170 -1.3% R 6,140 -2.7% 374.00 -3.6%
Dec-2016 R 6,450 1.4% R 6,200 -0.3% 354.73 -0.1%
Mar-2017 R 6,435 1.3% R 6,085 -0.7% 357.00 0.0%
May-2017 R 6,110 1.8% R 5,945 -0.3% 359.06 0.0%
Jul-2017 R 6,095 -0.5% - - 353.92 0.2%
Sep-2017 - - - - 354.73 -0.1% Source: JSE, CME
Oilseeds Futures 30 September 2016
Dec-16 Mar-17 May-17 Jul-17 Sep-17
CBOT Soya oil (US c/lb)
CBOT Soya cake meal (US$/t)
Calculated Sunflower Option prices (R/ton) RMB commodity desk (Tel: 011 269 9005)
Dec-16 Mar-17 May-17
Ask Put Call Ask Put Call Ask Put Call
6,500 716 666 6,480 781 736 6,160 771 721
6,460 694 684 6,440 759 754 6,120 748 738
6,420 672 702 6,400 736 771 6,080 726 756
-800-640-480-320-160
0160320480640800
Graph 4c: Weekly JSE SOY price change (R/ton)
-1,150
-920
-690
-460
-230
0
230
460
Graph 4e: Weekly JSE SUNS price change (R/ton)
____________________________________________________________________________________________________________________________________________
FNB Agri-Weekly Page 8
Sugar market trends (Graph 5)
International: Sugar prices retained the recent uptrend as
estimates still suggest a deficit for the year. Meanwhile, Brazil has reportedly experienced
some showers as many areas have been too dry.
Elsewhere, a smaller crop is expected India where sugar consumption will exceed production.
Raw sugar prices on the InterContinental Exchange (ICE) were up 3.1% w/w at US22.82 cents/lb, reaching a four year high.
ICE sugar futures were firm across the board with the Mar-17 contract closing at US23.0 cents/lb up 1.3% w/w while the sugar for May-17 delivery ended the week at US22.2 cents/lb up 0.6% w/w.
Source: InterContinental Exchange (ICE)
Source: USDA, PSD
Domestic: The September 2016 RV price was declared at R4, 995.63/ton, down R46.13 m/m. According to the Cane Growers Association, this is on the back of a lower sugar:RV ratio which despite
higher cane production resulted in sugar output of 1.601m tons, down 8,953 tons. The upside came from higher Local Market Demand Estimate (LMDE) of 1.587m tons, up 28,465 tons leaving no export availabilities given the decrease in output.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Graph 5a: World Sugar ending stocks trends (‘000 tons)
70%
72%
74%
76%
78%
80%
82%
0
50000
100000
150000
200000
Graph 5b: World Sugar production and % Cane
Total Sugar Production ('000t) % Cane
ICE Sugar Futures 30 September 2016
Mar-17 May-17 Jul-17 Oct-17 Mar-17
Sugar No.11 (US c/lb) 23.0 22.2 21.3 20.7 20.4 % Change w/w 1.3% 0.6% 0.2% 0.1% 0.1%
Graph 5: World Raw Sugar Price
No.11 (Usc/lb)
7
9
10
12
13
15
16
18
19
21
22
24
25
0 3 - Oc t- 15 0 1- Fe b- 16 0 1- Jun- 16 3 0 - Se p- 16
(USc/lb)
____________________________________________________________________________________________________________________________________________
FNB Agri-Weekly Page 9
FNB Business – Agriculture Meet our dedicated team of Agricultural Managers in various regions of South Africa
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