Weekly Market Report 28 February 2018

Transcription

1 Weekly Market Report 28 February 2018

2 CROP ESTIMATE COMMITTEE REPORT 2018/02/27: The Crop Estimate Committee (CEC) reported the South African maize crop at million tons which was well above the market expectation seen at million tons. The maize area planted was lowered slightly to million hectares. The soybean crop is estimated at at million tons with an area of hectares and the sunflower seed crop at tons with an area of hectares. The area estimates for both sunflower seed and soybeans were raised quite substantially compared to the previous forecast. The yields that are expected on the oilseeds are lower than the yields of last year with soya being estimated at a 1.77 tons per hectares compared to last year s 2.29 and sunflower at 1.25 compared to last year s 1.37.

3 USD/ZAR Exchange rate: The rand is currently quoted at R11.72 per US dollar, 4 cents stronger than last week. A lot has happened since last week s report following the budget speech. There were some positives taken out of the budget speech which is seen as credit positive by rating agencies and investors alike. One of these is the increase of VAT instead of throwing the burden on tax payers. Following a relative successful budget and then an overhaul of the cabinet the rand showed some tremendous strength gaining all the way as low as R11.50 against the dollar. Well as we have learned good news never seems to last. Yesterday afternoon a motion was passed in the national assembly to amend the constitution to be able to expropriate land without compensation. This has sent the rand on the back foot. I therefor expect the rand to come under further pressure until some more certainty regarding this important issue comes into the market. The two grey lines are Fibonacci retracement levels I believe will add some resistance. My main resistance will be the 20 day moving average at R Support will be at R11.56.

4 Soya bean meal: Soya bean meal for March 2018 is currently trading at dollars per short ton up 19.4 dollars in the last week. Prices have been supported by negative forecasts for the weather in Argentina. The weather at this stage doesn t seem to provide any relief. If any rains were to realise prices are likely to come under immense pressure. May 2018 is trading at Argentine soya bean meal premiums: Arg Premiums Sellers Buyers change F/M +4/3-1 3 A +4/3-1 1 M

5 Local Market: Mar May Mar 2018 change May 2018 change Jul 2018 change in last Jul 2018 in last week in last week week White maize First time included Yellow Maize First time included Wheat First time included Sunflower First time included Soya First time included May Yellow Maize: * Down * Up South African maize prices are up week on week, especially the new season yellow. The market traded up sharply in the session yesterday. With the crop estimate increasing substantially I believe that prices are likely to remain at current levels despite the weaker rand and higher US maize prices.

6 Weather:

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