16/06/01 16/06/15 16/06/29 16/07/13 16/07/27 16/08/10 16/08/24 16/09/07 16/09/21 16/10/05 16/10/19 16/11/02 16/11/16 16/11/30 16/12/14 16/12/28 17/01/11 17/01/25 17/02/08 17/02/22 17/03/08 WEEKLY MAIZE REPORT 08 MARCH 2017 Unigrain (Pty) Ltd Tel. No. : +27 11 692 4400 Fax. No. : +27 11 412 1183 INTERNATIONAL MARKET Table 1: CME Maize prices and weekly changes (cents/bushel) Currently 01/03/2017 Weekly change Monthly change (c/bu) (c/bu) CME May-17 374 ¼ 382-7 ¾ -4 ¼ CME Jul-17 381 ¼ 389 ¼ -8-4 ¼ From the table above we see that US maize prices did come under some pressure in the past week with both CME May and July coming under some pressure. On a monthly basis US maize prices are also lower with CME May and July giving up 1.12% and 1.10% in the past month respectively. On the technical chart for July CME maize we see that the market has been under pressure in the past 2-3 trading sessions after July CME maize did get some overhead resistance around $3.90. At this stage the short term averages and indicators are under some pressure which could continue to weigh on the market but support is seen at $3.81 and at the 100-day average seen at $3.74/bushel. US maize prices were pressured by the weakness seen in the US soybean prices. Figure 1 below presents the CME May maize/soybean spread seen in the past few months. From the graph below we see that the spread has narrowed in the past week with soybeans under pressure narrowing the spread. 740 720 700 680 660 640 620 600 580 560 540 520 Figure 1: CME May-17 maize/soy spread Figure 2 below we take a look at the US maize export progress seen this time of the year. From the graph below we see that the US maize committed for exports in the 2016/17 season is well above the export commitments seen the same time of the year in the past few seasons. In the 2016/17 season the maize committed for exports represents 77% of the USDA export estimate which is slightly ahead of the 5-year average seen at 74% for this time of the year. This could very well result in a slightly larger US maize export estimate down the line.
90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 Figure 2: US maize committed for exports and % of total 12/13 13/14 14/15 15/16 16/17 90 85 80 75 70 65 60 55 50 Commitments to date % of total (RHS) The next major data release for the US and world maize market will be the March USDA supply and demand estimates due to be released on Thursday. Looking ahead at the report we see that: The average market expectation of the 2016/17 US maize ending stocks are seen at 2.317 billion bushels which is slightly lower than the February estimate seen at 2.320 billion bushels. Despite small month/month decline expected in US maize ending stocks the 2016/17 US maize ending stocks are still expected at record highs. Figure 3 below presents the US maize ending stocks in the past few seasons. Figure 3: US maize ending stocks (million bushels) 2500 2000 1500 1000 500 0 The market will also be looking at the production estimates for South America. The USDA in their February report estimated the Argentine and Brazilian maize crops at 36.5 million and 86.5 million tons respectively. Earlier this week the forecaster FC Stone estimated the Brazilian maize crop at 93.3 million tons which is up from their previous estimate seen at 91.5 million tons with the favorable growing boosting crop prospects. Therefore there is room for the USDA to raise their South American crop estimate. 2
LOCAL MAIZE MARKET Figure 4 presents the weekly % change in our local maize market as well as the weekly change in CME maize prices and the rand. From the graph below we see that US maize prices did come under some pressure in the past week with May and July CME ending 2.03% and 2.06% lower in the past week. South African new crop July maize prices were rather flat with white maize ending 0.05% lower while yellow maize contracts gave up 0.49% in the past week. The rand is mostly unchanged from the levels seen a week ago with the rand quoted at R13.02/$ currently. 1.00 0.50 0.00-0.50-1.00 Figure 4: Safex WM and YM CME and rand/$ (% change) 0.08 May CME Jul CME Rand/$ Safex Jul WM Safex Jul YM -0.05-0.49-1.50-2.00-2.50-2.03-2.06-3.00 In the past week we did see that: The weather maps below presents the % of normal rainfall seen in the season to date (July-February) in 2017 and we also included the seasonal rainfall map for July to February 2016. From the rainfall map for 2017 we see that all of the key summer grain producing areas received above normal rainfall especially the western parts of the country. The weather map below presents cumulative rainfall forecast for South Africa in the week ahead. From the weather map we see that drier conditions are expected in the week ahead with some isolated rainfall amounts possible in the eastern parts of the Free State and parts of Mpumalanga. There is still a lot of activity in the Mozambique Channel but this time the system is not expected to bring much rainfall in our key growing areas the next 7-10 days. 3
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Figure 6: Cumulative rainfall forecast for week ahead The weekly South African maize exports for the week ending the 3 rd of March indicated that 15 550 tons of maize was exported in the past week including 11 269 tons of white maize and 4 281 tons of yellow maize. This brings the cumulative maize exports for the season to date at 674 411 tons including 417 354 tons of white maize and 257 057 tons of yellow maize. In the past week we did see yellow maize imports of 62 095 tons bringing the cumulative yellow maize imports for the season to date at 1.372 million tons while white maize imports is seen at 661 149 tons. Figure 7 below presents the cumulative whole maize exports seen at the end of February in the past few seasons. From the data in the graph below we see that on average the whole maize exports at the end of February represents 85% of the total marketing year exports. This could point to total whole maize exports 2500 2000 1500 1000 500 0 Figure 7: South African whole maize exports end Feb and % of total 100.0 95.0 90.0 85.0 80.0 75.0 70.0 65.0 60.0 55.0 50.0 Maize exports end Feb % of total end Feb (RHS) The weekly South African producer deliveries of maize for the week ending the 3 rd of March indicated that 12 553 tons of maize was delivered in the past week including 7 698 tons of white maize and 4 855 tons of yellow maize. We did see upward revisions of 17 439 tons of white maize and 9 211 tons of yellow maize to the producer deliveries of the previous week. The supply and demand estimate depends on early deliveries and therefore this will be monitored closely by the market. As a matter of interest we take a look at the white and yellow maize deliveries seen in the month of March in the past few seasons in order to get an idea of maize deliveries this time of the year in the past few seasons. 4
300 000 Figure 9: South AFrican white and yellow maize deliveries in March 250 000 200 000 150 000 100 000 50 000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 FOCUS FOR THE WEEK US maize prices did come under some pressure in the past week with most of the losses seen in the past 2-3 trading sessions. The US and world supplies and another larger crop out of South America are limiting some of the strength in the market. On the technical chart for July CME maize we see that the market has been under some pressure with some of the short term averages and indicators under some pressure. Support is seen at $3.81 and $3.74 (100-day average). The next major data release for the US and world maize market will be the USDA supply and demand estimates due to be released on Thursday. The market is looking for a slightly lower US maize ending stocks estimate. South African maize prices ended mostly flat in the past week (at least the new crop prices) with the rand still trading around d$13.00/$. There is not major concern with regard to the weather and growing conditions and we are sitting on a near record crop therefore there is very little new input in our market. On the technical chart for Safex July white maize we see that the market traded around R1900/ton in the past week. The moving averages remain under pressure but the market is oversold. We have mentioned before there could be some divergence between the RSI and prices which could result in some short covering. Also see the technical graphs below Safex July-17 white maize prices CME July-17 corn prices 5
Daily MAWN7 Cndl, MAWN7, Trade Price 2017/03/08, 1 890.00, 1 915.00, 1 885.00, 1 905.00, +2.00, (+0.11%) SMA, MAWN7, Trade Price(Last), 100 2017/03/08, 2 411.57 SMA, MAWN7, Trade Price(Last), 40 2017/03/08, 2 102.33 SMA, MAWN7, Trade Price(Last), 9 2017/03/08, 1 917.78 SMA, MAWN7, Trade Price(Last), 200 2017/03/08, 2 685.48 2016/05/03-2017/03/24 (JHB) Price ZAR T 3 200 3 100 3 000 2 900 2 800 2 700 2 600 2 500 2 400 2 300 2 200 2 100 2 000 1 900 MACD, MAWN7, Trade Price(Last), 12, 26, 9, Exponential 2017/03/08, -82.74, -87.81 Value ZAR T RSI, MAWN7, Trade Price(Last), 14, Wilder Smoothing 2017/03/08, 31.343 Value ZAR T 03 09 16 23 30 06 13 20 27 04 11 18 25 01 08 15 22 29 05 12 19 26 03 10 17 24 31 07 14 21 28 05 12 19 28 03 09 16 23 30 06 13 20 27 06 13 20 May 2016 June 2016 July 2016 August 2016 September 2016 October 2016 November 2016 December 2016 January 2017 February 2017 March 2017 6
Daily CN7 Cndl, CN7, Trade Price, 2017/03/08, 383, 384, 381 1 / 4, 381 1 / 4, -2, (-0.52%), SMA, CN7, Trade Price(Last), 40, 2017/03/08, 381 1 / 4+, SMA, CN7, Trade Price(Last), 9, 2017/03/08, 383+, SMA, CN7, Trade Price(Last), 100, 2017/03/08, 374 3 / 8+ MACD, CN7, Trade Price(Last), 12, 26, 9, Exponential, 2017/03/08, 1 1 / 8+, 1 5 / 8+ RSI, CN7, Trade Price(Last), 14, Exponential, 2017/03/08, 43.670 2016/05/26-2017/03/22 (CHG) Price USc Bsh 445 440 435 430 425 420 415 410 405 400 395 383+ 390 381 385 1 / 4+ 381 1 / 4 380 374 375 3 / 8+ 370 365 360 355 350 345 340 1/8 1Value 5 / 8+ 1USc 1 / 8+ Bsh 1/8 Value USc 43.670 Bsh 31 06 13 20 27 05 11 18 25 01 08 15 22 29 06 12 19 26 03 10 17 24 31 07 14 21 28 05 12 19 27 03 09 17 23 30 06 13 21 27 06 13 20 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 7