17/08/01 17/08/15 17/08/29 17/09/12 17/09/26 17/10/10 17/10/24 17/11/07 17/11/21 17/12/05 17/12/19 18/01/02 18/01/16 18/01/30 18/02/13 18/02/27 18/03/13 18/03/27 18/04/10 18/04/24 18/05/08 18/05/22 18/06/05 WEEKLY MAIZE REPORT 13 JUNE 2018 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 06/06/2018 Weekly change Monthly change (c/bu) (c/bu) CME May-18 376 378-2 -21 CME Jul-18 396 ½ 399 ¾ -3 ¼ -17 ¾ US maize prices traded lower in the past week with both the old and new crop contracts coming under some pressure. On a monthly basis US maize prices are also lower with CME July and December ending 5.3% and 4.3% lower in the past month respectively. On the technical chart for July CME maize we see that the market sold off sharply in the past week with the market breaking below the key averages including the 200-day average and the market traded as low as $3.67/bushel which was its lowest since mid- January 2019. The market has since pulled higher in the daytime session yesterday with some short covering that was seen and the market recovering from the oversold territory. Support is seen in the $3.66-$3.63 area and resistance is seen at $3.82 and $3.90/bushel. US maize prices initially traded lower with the weather conditions in the US Midwest weighing on prices. The fact that the US maize crop conditions is seen at new highs for this time of the year also weighed on prices. CME maize prices posted some strong gains in the daytime session yesterday with the supportive USDA maize ending stock estimates resulting in some short covering in US maize futures. US MARKET US maize prices have been under some pressure in the past week with the favorable growing conditions in the US Midwest adding some pressure. The US maize prices lost significantly more ground compared to the wheat market and this resulted in the CME maize/wheat spread gaining some ground and traded as high as $1.50/bushel in the past week. 160 150 140 130 120 110 100 90 80 70 60 Figure 1: CME maize/wheat spread (c/bu) The USDA in their weekly crop progress report indicated that 94% of the US maize crop has emerged which is up from the 86% reported last week and slightly ahead of the 5-year average seen at 92% for this time of the year. The USDA in their weekly crop conditions report indicated that 77% of the US maize crop could be rated as good/excellent which is 1% lower than the crop rating seen last week. The current % rated as good/excellent is still well above the 67% in this category the same time last year.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 From the graph below we see that the 2018 % rated good/excellent is still seen at record high levels for this time of the year. Figure 2: US maize crop conditons (% rated good/excellent) 85 75 65 60 69 77 69 66 63 75 74 75 67 77 55 45 35 25 15 The weather forecast for the week ahead expects slightly drier conditions with most of the rainfall forecasted for the southern parts of the US Midwest in the week ahead. The temperature forecast still expects slightly above normal temperatures in the US Midwest in the week ahead. The extended 6-10 day forecast for the US Midwest expects above normal rainfall in most of the Midwest and the warmer temperatures are expected to continue in the extended forecast. Figure 3: Cumulative rainfall forecast week ahead USDA REPORT The USDA in their report yesterday estimated the US 2017/18 maize ending stocks at 2.102 billion bushels which was lower than the market expectation seen at 2.166 billion bushels and down from the May USDA estimate seen at 2.182 billion bushels. The US 2018/19 maize ending stocks was estimated at 1.577 billion bushels which was also lower than the market expectation seen at 1.663 billion bushels and lower than the May estimate seen at 1.682 billion bushels. Changes to the new crop balance sheet included lower opening stocks, lower feed usage and higher US maize export estimate. US maize ending stocks are under pressure in the 2018/19 season and expected at its lowest level in 5-years. The US 2018/19 maize stock to usage ratio is seen at 10.8% which is also the lowest since the 2013/14 season. 2
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 18/19 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 18/19 16000 15000 14000 13000 12000 11000 10000 9000 8000 7000 6000 Figure 4: US maize production and ending stocks (mil bu) 2500 2000 1500 1000 500 0 Production Ending stocks (mil bu) (RHS) In terms of the rest of the world the USDA estimated the 2018/19 world maize crop at 1 052.42 million tons which is down from the 1 056.07 million seen in the report last month. Changes to the world maize include smaller crop estimates for the FSU region (-4 million tons). The 2018/19 world maize ending stocks was estimated at 154.69 million tons which is down from the May estimate seen at 159.15 million tons. The graph below presents the world maize production and ending stocks seen in the past few seasons. The graph below presents the world maize production and ending stocks seen in the past few seasons. 1200000 1100000 1000000 900000 800000 700000 600000 500000 400000 Figure 5: World maize production and ending stocks (000 tons) 250000 200000 150000 100000 50000 Production Ending stocks (mil tons) (RHS) LOCAL MAIZE MARKET South African maize prices ended mostly flat in the past week with the lower US maize prices being countered by the weaker rand seen in the past few sessions. South African rand broke higher in the past week with the rand trading as high as R13.39/$ in the session today but has since pulled off that level. There could be some divergence on the rand. The South African producer deliveries have started to gain some momentum which is probably capping some of the gains in our market with some producer selling. 3
17/10/02 17/10/16 17/10/30 17/11/13 17/11/27 17/12/11 17/12/25 18/01/08 18/01/22 18/02/05 18/02/19 18/03/05 18/03/19 18/04/02 18/04/16 18/04/30 18/05/14 18/05/28 18/06/11 6.00 5.00 Figure 6: Safex WM and YM CME and rand/$ (% change) 4.88 4.00 3.00 2.00 1.00 0.00-1.00-2.00 Jul CME Dec CME Rand/$ Safex Jul WM Safex Jul YM -0.53-0.81-0.05-0.32 South African maize prices in dollar terms have also been under some pressure lately with the weaker rand resulting in prices being under pressure in dollar terms. July yellow maize is currently trading around $165/ton which is its lowest level since early February 2018. July white maize is currently trading around $156/ton. 185 180 175 170 165 160 155 150 145 140 Figure 7: Safex July white and yellow maize prices ($/ton) July WM July YM The weekly South African maize exports for the past week was reported at 27 103 tons including 6 703 tons of white maize and 20 400 tons of yellow maize. Most of the yellow maize was exported to Korea. This brings the cumulative maize exports for the season to date at 312 106 tons including 64 560 tons of white maize and 247 546 tons of yellow maize. 4
2 Mar 9 Mar 16 Mar 23 Mar 30 Mar 6 Apr 13 Apr 20 Apr 27 Apr 04 May 11 May 18 May 25 May 1 Jun 8 Jun 29-05 May 13-19 May 27-02 Jun 10-16 Jun 24-30 Jun 08-14 Jul 22-28 Jul 05-11 Aug 19-25 Aug 02-08 Sep 16-22 Sep 30-06 Oct 14-20 Oct 28-03 Nov 11-17 Nov 25-01 Dec 09-15 Dec 23-29 Dec 06-12 Jan 20-26 Jan 03-09 Feb 17-23 Feb 03-09 Mar 17-23 Mar 31-06 Apr 14-20 Apr 28-04 May 12-18 May 26-01 Jun 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 Figure 8: Weekly South African white and yellow maize exports White maize Yellow miaze The weekly South African producer deliveries of maize for the past week indicated that 511 875 tons of maize was delivered including 168 524 tons of white maize and 343 351 tons of yellow maize. Some downward revisions was seen to the delivery totals of last week and the cumulative in season deliveries (from beginning of May) to date is seen at 1.428 million tons including 498 813 tons of white maize and 928 831 tons of yellow maize. 600000 Figure 9: Weekly South African producer deliveries of maize 500000 400000 300000 200000 100000 0 White maize Yellow maize FOCUS FOR THE WEEK US maize prices traded lower for most of the past week with the favourable weather conditions and the US maize crop conditions seen to date putting some pressure on prices. Uncertainty with regard to future trade between the US and trading partners also added some pressure. The market did come under pressure following the USDA report yesterday. The weather forecast expects slightly drier conditions the next few days with the warm and wet weather conditions to return in the 6-10 day forecast. On the technical chart for July CME maize we see that the market broke below the key averages in the past week finding some support around $3.66 and the market pulled off that level since. Support is seen at $3.66-$3.63 and resistance is seen at $3.82 and $3.90. South African maize prices ended mostly flat in the past week with the lower US maize prices being countered by the weaker rand. The producer deliveries of maize also started to gain some momentum which is limiting the gains in our market. 5
On the technical chart for July WM we see that the market once again broke below the 40-day average in the past week with support seen around R2070 and R2050 while resistance is seen at R2107 and the R2120 area. Also see the technical graphs below Safex July-17 white maize prices CME July-17 corn prices 6
Daily MAWN8 Cndl, MAWN8, Trade Price 2018/06/13, 2 116.00, 2 124.00, 2 097.20, 2 099.80, +29.80, (+1.44%) SMA, MAWN8, Trade Price(Last), 100 2018/06/13, 2 025.28 SMA, MAWN8, Trade Price(Last), 40 2018/06/13, 2 107.50 SMA, MAWN8, Trade Price(Last), 9 2018/06/13, 2 093.64 SMA, MAWN8, Trade Price(Last), 200 2018/06/13, 2 051.40 2017/09/19-2018/06/27 (JHB) Price ZAR T 2 180 2 160 2 140 2 120 1 860 MACD, MAWN8, Trade Price(Last), 12, 26, 9, Exponential 2018/06/13, -3.71, 4.25 Value ZAR T RSI, MAWN8, Trade Price(Last), 14, Wilder Smoothing 2018/06/13, 49.008 Value ZAR T 30 2 100 2 080 2 060 2 040 2 020 2 000 1 980 1 960 1 940 1 920 1 900 1 880 26 02 09 16 23 30 06 13 20 27 04 11 18 27 02 08 15 22 29 05 12 19 26 05 12 19 26 03 09 16 23 30 07 14 21 28 04 11 18 25 Sep 17 October 2017 November 2017 December 2017 January 2018 February 2018 March 2018 April 2018 May 2018 June 2018 7
Daily CN8 2017/08/29-2018/06/28 (CHG) Cndl, CN8, Trade Price, 2018/06/13, 378, 380, 375, 376, -2, (-0.53%), SMA, CN8, Trade Price(Last), 40, 2018/06/13, 395, SMA, CN8, Trade Price(Last), 9, 2018/06/13, 379, SMA, CN8, Trade Price(Last), 100, 2018/06/13, 390, SMA, CN8, Trade Price(Last), 9, 2018/06/13, 379, SMA, CN8, Trade Price(Last), 200, 2018/06/13, 382 Price USc Bsh 408 405 402 399 396 395 393 390 390 387 384 382 381 379 379 378 376 375 372 369 366 RSI, CN8, Trade Price(Last), 14, Exponential, 2018/06/13, 37.340 363 Value USc Bsh 37.340 30 05 11 18 25 02 09 16 23 30 06 13 20 27 04 11 18 26 02 08 16 22 29 05 12 20 26 05 12 19 26 02 09 16 23 30 07 14 21 29 04 11 18 25 September 2017 October 2017 November 2017 December 2017 January 2018 February 2018 March 2018 April 2018 May 2018 June 2018 8