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 17/18 WEEKLY MAIZE REPORT 13 DECEMBER 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 06/12/2017 Weekly change Monthly change (c/bu) (c/bu) CME Mar-18 349 352 ¾ -3 ¾ -6 CME Jul-18 365 ¼ 369 ¼ -4-6 From the table above we see that US maize prices did come under some pressure in the past week with CME March and July maize prices coming under some pressure. On a monthly basis US maize prices are also trading lower with March and July maize contracts ending 1.7% and 1.6% lower in the past month respectively. On the technical chart for March CME maize we see that the market did come under some pressure in the past week with March maize prices trading to new contract lows of $3.53/bushel in the daytime session yesterday. On the technical chart the moving averages and indicators remain under some pressure but the market is oversold and there could be some divergence between the RSI and prices. US maize prices did come under some pressure in the past week with the spillover weakness from the lower US soybean prices and the improved weather and growing conditions in South America and more specifically Argentina adding some support. The USDA report provided some short term support but profit taking by market long was seen on the higher prices. The USDA released their December supply and demand estimates in their report yesterday. Looking at the USDA numbers we see that: The USDA estimated the 2017/18 US maize ending stocks at 2.437 billion bushels which was slightly lower than the market expectation seen at 2.478 billion bushels and lower than the November USD estimate seen at 2.487 billion bushels. Changes to the US supply and demand estimates included a 50 million bushel increase in the maize used in the production of ethanol. Figure 1 below presents the US maize production and ending stocks seen in the past few seasons. From the graph below we see that despite the slightly lower ending stocks us maize stocks in the 2017/18 season is still seen at record highs. 16000 15000 14000 13000 12000 11000 10000 9000 8000 7000 6000 Figure 1: US maize production and ending stocks (mil bu) 3000 2500 2000 1500 1000 500 0 Production Ending stocks (mil bu) (RHS) As mentioned the USDA did raise their estimate for maize used in the production of ethanol. The maize used for ethanol production in the 2017/18 season was estimated at 5.525 billion bushels which is also a new record high for maize used in ethanol production. Figure 2 below presents the maize used in the production of ethanol in the US as well as maize used for ethanol as % of total consumption. From the graph below we see that maize used for ethanol is expected to reach new record highs in 2017/18 and ethanol production represents 38.1% of total consumption.
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 17/18 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 17/18 6000 5000 4000 3000 2000 1000 0 Figure 2: Ethanol usage of maize and % of total consumption (mil bu) 44.0 39.0 34.0 29.0 24.0 19.0 14.0 9.0 4.0 Ethanol usage % of total consumption (RHS) In terms of the rest of the world the USDA estimated the 2017/18 world maize crop at 1 044.75 million tons which was slightly higher than the November estimate seen at 1 043.90 million tons. The USDA raised the maize crop estimates for the E and China while the maize crop estimate for the FSU regions was lowered slightly. The 2017/18 world maize ending stocks was estimated at 204.08 million tons which is up from the November estimate seen at 203.86 million tons. Figure 3 below presents the world maize production and ending stocks estimates seen in the past few seasons. 1200000 1100000 1000000 900000 800000 700000 600000 500000 400000 Figure 3: World maize production and ending stocks (000 tons) 250000 200000 150000 100000 50000 Production Ending stocks (mil tons) (RHS) The South American maize crop estimates was left unchanged with the Argentine maize crop seen at 42 million tons while the Brazilian maize crop was left unchanged at 95 million tons. Figure 4 below presents the South American (Argentina and Brazil) maize production seen in the past few seasons. From the graph below we see that the 2017/18 South American maize crop is seen near record high levels despite the earlier weather concerns in Argentina. 2
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 17/18 160000 140000 120000 100000 80000 60000 40000 20000 0 Figure 4: Argentine and Brazilian maize production Argentina Brazil The weather map below presents the cumulative rainfall forecast for South America in the week ahead. From the weather map below we see that some light rainfall is forecasted in some of the key growing areas of Argentina in the week ahead. The weather forecast for the 2 nd week of the forecast (12-20 December) expects some widespread showers for most of the key producing areas of Argentina and Brazil which if realized should be beneficial for crop production. Figure 5 below presents the cumulative rainfall forecast for the week ahead. Figure 5: Cumulative rainfall forecast for week ahead LOCAL MAIZE MARKET Figure 6 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 the US maize prices did come under some pressure in the past week with March and July CME maize prices ending 1.06% and 1.08% lower in the past week respectively. South African maize prices ended mostly flat in the past week with March white and yellow maize ending 0.16% and 0.20% lower in the past week while new crop July white maize ended flat. South African maize prices ended mostly flat despite the weaker rand that was seen. The rand is currently trading around R13.65/$ compared to the R13.50/$ seen a week ago. 3
2.00 1.50 1.00 Figure 6: Safex WM and YM CME and rand/$ (% change) 1.11 0.50 0.00-0.50-1.00-1.50 Mar CME Jul CME Rand/$ Safex Mar WM Safex Mar YM Safex Jul WM -1.06-1.08-0.16-0.20-0.05-2.00 In the past week we did see that: The weather map below presents the cumulative rainfall for the week ending the 11 th of December. From the weather map below we see that some more widespread rainfall was seen for most of the eastern growing areas in the past week. Most of Mpumalanga, Gauteng and the eastern parts of the Free State did see some good rainfall amounts. At this stage the central and western parts of the North West province and the southern Free State could do with some rainfall. Figure 7: Rainfall seen in the past 7-days The weekly South African maize exports for the week ending the 8 th of December indicated that 48 601 tons of maize was exported in the past week. The maize that was exported included 5 679 tons of white maize and 42 922 tons of yellow maize. This brings the cumulative maize exports for the season to date at 1.701 million tons including 540 097 tons of white maize and 1.160 million tons of yellow maize. Figure 8 below presents the weekly South African white and yellow maize exports in the marketing season to date. From the graph below we see that there has been a solid increase in South African yellow maize exports in the past 2-3 weeks. 4
29-05 May 06-12 May 13-19 May 20-26 May 27-02 Jun 03-09 Jun 10-16 Jun 17-23 Jun 24-30 Jun 01-07 Jul 08-14 Jul 15-21 Jul 22-28 Jul 29-04 Aug 05-11 Aug 12-18 Aug 19-25 Aug 26-01 Sep 02-08 Sep 09-15 Sep 16-22 Sep 23-29 Sep 30-06 Oct 07-13 Oct 14-20 Oct 21-27 Oct 28-03 Nov 04-10 Nov 11-17 Nov 18-24 Nov 25-01 Dec 02-08 Dec 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 Figure 8: Weekly South African white and yellow maize exports White maize Yellow miaze Taking a final look at the producer deliveries we look at the pace of maize producer deliveries in the current season compared to the past few seasons. Figure 9 below presents the cumulative producer deliveries of white maize by the end of November in the past few seasons as well as the % of total deliveries seen by the end of November. In the 2017 to total deliveries is estimates as the CEC crop estimate minus 150 000 tons of farm retentions. From the data in the graph below we see that on average in the past 5 years the deliveries at the end of November represented 96.3% of total deliveries and the average for the past 10-years is seen at 97.4%. In 2017 the deliveries by the end of November represents 97.5% of our estimate of total deliveries which is very much in line with the averages. The CEC will release their finalization of the 2017 crop in mid-february 2018. 10 000 000 9 000 000 8 000 000 7 000 000 6 000 000 5 000 000 4 000 000 3 000 000 2 000 000 1 000 000 Figure 9: White maize deliveries end Nov and % of total 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 100.0 99.0 98.0 97.0 96.0 95.0 94.0 93.0 92.0 Deliveries end of nov % of Total (RHS) Figure 10 below presents the cumulative producer deliveries of yellow maize by the end of November as well as the % of total deliveries seen by the end of November. From the data in the graph below we see that on average in the past 5-years around 96.9% has been delivered by the end of November while the 10-year average is seen at 97.4%. In the 2017 season the deliveries seen at the end of November represents 98.1% of our estimate of total deliveries which is slightly ahead of the pace. 5
7 000 000 6 000 000 5 000 000 4 000 000 3 000 000 2 000 000 1 000 000 Figure 10: Yellow maize deliveries end Nov and % of total 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 100.0 99.0 98.0 97.0 96.0 95.0 94.0 93.0 92.0 Maize deliveries end Nov % of total (RHS) The weather forecast for the week ahead expects slightly drier conditions in the eastern growing areas of the country which will be welcomed in most areas after the widespread rainfall that was seen in the past week. Some rainfall is forecasted for the central parts of the country as well as the central and western parts of the North West province which is in need of some rainfall. The next rainfall even is expected from Monday-Wednesday next week. Figure 11 presents the cumulative rainfall forecast for the week ahead. Figure 11: Cumulative rainfall forecast week ahead FOCUS FOR THE WEEK US maize prices did come under some pressure in the past week with some technical selling that was seen while the improved weather forecast for Argentina also added some pressure to US maize and soybean prices. On the technical chart for March CME maize we see that the market we see that the market set new contract lows in the session yesterday $3.53/bushel and the moving averages and indicators remain under pressure which could limit some of the buying interest in the market. South African maize prices ended mostly flat for both the old and new crop contracts in the past week with the lower US maize prices being countered by the slightly weaker rand seen in the past week. The rand is currently trading around R13.65/$. Some good widespread rainfall was seen in the eastern parts of the county but some of the western growing areas are in need of some rainfall and not much rainfall is forecasted at this stage. There could be some rainfall in the 1 st half of next week. On the technical chart for March Safex white maize we see that our market did get some resistance in the R1965 area and prices pulled lower after that. The market has broken below the 9-day average and came under some more pressure. The shorter moving averages are under pressure but the indicators have flattened out. 6
Also see the technical graphs below Safex March-17 white maize prices CME March-17 corn prices 7
Daily MAWH8 Cndl, MAWH8, Trade Price 2017/12/13, 1 918.00, 1 925.00, 1 897.00, 1 920.00, +8.00, (+0.42%) SMA, MAWH8, Trade Price(Last), 100 2017/12/13, 1 981.26 SMA, MAWH8, Trade Price(Last), 40 2017/12/13, 2 022.98 SMA, MAWH8, Trade Price(Last), 9 2017/12/13, 1 930.67 SMA, MAWH8, Trade Price(Last), 200 2017/12/13, 1 997.05 2017/02/28-2018/01/01 (JHB) Price ZAR T 2 190 2 160 2 130 Auto MACD, MAWH8, Trade Price(Last), 12, 26, 9, Exponential 2017/12/13, -32.14, -25.27 Value ZAR T Auto RSI, MAWH8, Trade Price(Last), 14, Wilder Smoothing 2017/12/13, 37.031 Value ZAR T 30 06 13 20 27 03 10 18 24 02 08 15 22 29 05 12 19 26 03 10 17 24 31 07 14 21 28 04 11 18 26 02 09 16 23 30 06 13 20 27 04 11 18 27 01 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 October 2017 November 2017 December 2017 2 100 2 070 2 040 2 010 1 980 1 950 1 920 1 890 1 860 1 830 Auto 8
Daily CH8 Cndl, CH8, Trade Price, 2017/12/13, 348, 349 1 / 4, 347 3 / 4, 348 3 / 4, +1, (+0.29%), SMA, CH8, Trade Price(Last), 40, 2017/12/13, 356 7 / 8+, SMA, CH8, Trade Price(Last), 9, 2017/12/13, 352+, SMA, CH8, Trade Price(Last), 100, 2017/12/13, 366 3 / 4+ 2017/03/03-2017/12/28 (CHG) Price USc Bsh 415 410 405 400 395 390 385 380 375 370 366 3 / 4+ 365 MACD, CH8, Trade Price(Last), 12, 26, 9, Exponential, 2017/12/13, -2 3 / 8+, -2 1 / 8+ RSI, CH8, Trade Price(Last), 14, Exponential, 2017/12/13, 36.959 06 13 20 27 03 10 17 24 01 08 15 22 30 05 12 19 26 03 10 17 24 31 07 14 21 28 05 11 18 25 02 09 16 23 30 06 13 20 27 04 11 18 26 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 October 2017 November 2017 December 2017 360 356 7 / 8+ 355 352+ 350 348 3 / 4 1/8-2 Value 1-2 USc / 8+ 3 / 8+ Bsh 1/8 Value USc 36.959 Bsh Auto 9