28 29 21 211 212 213 214 215 216 217 218 WEEKLY MAIZE REPORT 11 JULY 218 Unigrain (Pty) Ltd Tel. No. : +27 11 692 44 Fax. No. : +27 11 412 1183 INTERNATIONAL MARKET Table 1: CME Maize prices and weekly changes (cents/bushel) Currently 3/7/218 Weekly change Monthly change (c/bu) (c/bu) CME Sep-18 345 352-7 -44 ¾ CME Dec-18 358 364-6 -43 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 still sharply lower with CME September and December ending 11.5% and 1.7% lower in the past month respectively. On the technical chart for December CME maize we see that the market remains under pressure breaking below the 9-day average once again in the past week and setting new lows of $3.57/bushel. The moving averages and indicators remain under pressure but the market is oversold and there could be some divergence between the RSI and prices, which could result in some short covering. The favorable weather conditions in the US Midwest remains a bearish factor for US maize boosting crop prospects. The forecast for the next 1-days expects cooler and wetter conditions which should be beneficial for the US maize and soybean crops. The ongoing trade war between the US and China also weighed on US maize and soybeans recently largely due to the uncertainty with regard to future trade. US MARKET The USDA in their report estimated that 75% of the US maize crop could be rated as good/excellent which is 1% lower week/week which was in line with the market expectations. The 218 crop rating is still well above the 65% rated as good/excellent the same time last year. From the graph below we see that the 218 % rated as good/excellent is still the 2 nd highest crop rating for this time of the year in the past few seasons. Figure 1: US maize crop conditons (% rated good/excellent) 85 75 65 62 71 73 69 68 75 69 76 65 75 55 45 4 35 25 15 US Weather The weather forecast for the week ahead expects slightly drier conditions especially in the central and eastern parts of the US Midwest while some rainfall is forecasted for the western parts in the week ahead.
Figure 2: Cumulative rainfall forecast week ahead Looking at the extended 6-1 day forecast we see that above normal rainfall is forecasted for most of the US Midwest in the 2 nd week of the forecast. The temperature forecast has cooled down from the forecasts seen earlier. With the US maize crop entering pollination phase the weather will become increasingly important. US 6-1 Day rainfall forecast US 6-1 Day temperature forecast USDA supply and demand estimates The USDA will release their July supply and demand estimates in their report on Thursday. The average market expectation of the US 217/18 maize ending stocks is seen at 2.17 billion bushels which is mostly unchanged from the June estimate seen at 2.12 billion bushels. The US new crop 218/19 US maize ending stocks is seen at 1.712 billion bushels which is well above the June USDA estimate seen at 1.577 billion bushels. From the graph below we see that the 218/19 US maize ending stocks is still well below the ending stocks seen in the past 2-seasons. 2
9/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/ /1 1/2 2/3 3/4 4/5 5/6 6/7 7/8 8/9 9/1 1/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 25 Figure 4: US maize ending stocks (million bushels) 2 15 1 5 US maize export progress Looking at the US maize export progress seen to date (week 43 of the marketing season) we see that the cumulative maize committed for exports in the 217/18 season is higher than the commitments seen in the past few seasons. The maize committed for exports in 217/18 represents 99% of the USDA export estimate which is very much in line with the 5-year average seen for this time of the year. 7 6 5 4 3 2 1 Figure 5: US maize committed for exports and % of total 13/14 14/15 15/16 16/17 17/18 11 15 1 95 9 85 Commitments to date % of total (RHS) US ethanol production The weekly US ethanol production was reported at 1.67 million barrels/day which is slightly off the recent highs of 1.72 million barrels/day seen in the previous week. The US ethanol production has been rather strong recently. US ethanol production is being supported by the rally in crude oil prices boosting the demand for ethanol. WTI crude oil prices traded as high as $75/barrel in the past week which is its highest level since November 214. 3
16/1/1 16/2/1 16/3/1 16/4/1 16/5/1 16/6/1 16/7/1 16/8/1 16/9/1 16/1/1 16/11/1 16/12/1 17/1/1 17/2/1 17/3/1 17/4/1 17/5/1 17/6/1 17/7/1 17/8/1 17/9/1 17/1/1 17/11/1 17/12/1 18/1/1 18/2/1 18/3/1 18/4/1 18/5/1 18/6/1 115 Figure 6: Weekly US ethanol production ( barrels) 11 15 1 95 9 85 8 LOCAL MAIZE MARKET South African maize prices traded lower in the past week with the lower US maize prices and the stronger rand seen in the past few sessions adding some pressure. Safex December white and yellow maize ended 3.5% lower in the past week. The rand is currently trading around R13.43/$ which is 1.68% stronger than the levels seen at week ago (R13.66/$). The rand did trade to an intraday low of R13.23/$ in the session yesterday. On the technical chart for December white maize we see that some follow through selling was seen after the market broke below the key averages earlier including the 1-day and 2-day. The market is currently trading at levels last seen in early April. The market also managed to close the gap left op in the beginning of April. 1..5. -.5-1. -1.5-2. -2.5-3. -3.5-4. Figure 7: Safex WM and YM CME and rand/$ (% change) Sep CME Dec CME Rand/$ Safex Dec WM Safex Dec YM -1.65-1.68-1.99-3.5-3.5 Looking at the South African December white and yellow maize in dollar terms the South African maize prices we see that the market remains under pressure with December yellow maize seen around $162/ton currently while white maize is seen at $156/ton. In dollar terms our market is currently at levels last seen in early December 217. 4
29-5 May 13-19 May 27-2 Jun 1-16 Jun 24-3 Jun 8-14 Jul 22-28 Jul 5-11 Aug 19-25 Aug 2-8 Sep 16-22 Sep 3-6 Oct 14-2 Oct 28-3 Nov 11-17 Nov 25-1 Dec 9-15 Dec 23-29 Dec 6-12 Jan 2-26 Jan 3-9 Feb 17-23 Feb 3-9 Mar 17-23 Mar 31-6 Apr 14-2 Apr 28-4 May 12-18 May 26-1 Jun 9-15 Jun 23-29 Jun 17/1/2 17/1/16 17/1/3 17/11/13 17/11/27 17/12/11 17/12/25 18/1/8 18/1/22 18/2/5 18/2/19 18/3/5 18/3/19 18/4/2 18/4/16 18/4/3 18/5/14 18/5/28 18/6/11 18/6/25 18/7/9 195 19 185 18 175 17 165 16 155 15 Figure 7: Safex December white and yellow maize ($/ton) Dec WM Dec YM The weekly South African maize exports for the week ending the 6 th of July indicated at 122 298 tons of maize was exported in the past week. The maize that was exported included 6 26 tons of white maize and 116 272 tons of yellow maize. Most of the yellow maize was exported to Vietnam. This brings the cumulative maize exports for the season to date at 668 33 tons including 93 923 tons of white maize and 574 47 tons of yellow maize. 18 16 14 12 1 8 6 4 2 Figure 8: Weekly South African white and yellow maize exports White maize Yellow miaze The Sagis report for intended maize exports for the next few weeks indicated that 171 668 tons of maize was up for exports in the week ending the 6 th of July. The intended maize exports for the next 8-weeks is seen at 469 685 tons including 38 25 tons of white maize and 431 66 tons of yellow maize. However this is preliminary and the actual totals will probably be different. 5
2 Mar 9 Mar 16 Mar 23 Mar 3 Mar 6 Apr 13 Apr 2 Apr 27 Apr 4 May 11 May 18 May 25 May 1 Jun 8 Jun 15 Jun 22 Jun 29 Jun 6 Jul 2 18 16 14 12 1 8 6 4 2 Figure 9: Intended maize exports for weeks ahead 171668 114155 111455 63455 558 668 5988 918 3 6 Jul 13 Jul 2 Jul 27 Jul 3 Aug 1 Aug 17 Aug 24 Aug 31 Aug The weekly South African producer deliveries of maize for the week ending the 6 th of July indicated that 929 761 tons was delivered in the past week. The maize that was delivered included 5 481 tons of white maize and 429 28 tons of yellow maize. After some adjustments were seen the cumulative in season deliveries for the season to date is seen at 5.94 million tons including 2.112 million tons of white maize and 2.982 million tons of yellow maize. 12 Figure 1: Weekly South African producer deliveries of maize 1 8 6 4 2 White maize Yellow maize FOCUS FOR THE WEEK US maize prices traded lower in the past week with December CME setting new contract lows once again in the past week. The favourable weather conditions and US maize crop prospects weighing on prices. On the technical chart the moving averages remain under pressure and support is seen at the contract lows of around $3.57/bushel. There could be some divergence between the RSI and prices resulting in some short covering. Key data for the US market will be the USDA supply and demand estimates due to be released on Thursday. South African maize prices traded lower in the past week with the stronger rand, lower US maize prices and the harvesting of our white and yellow maize weighing on our market. The producer deliveries of white and yellow maize have gained some momentum in the past 2-weeks. On the technical chart for December white maize we see that the market has been under some pressure recently with the market briefly trading below R21 closing up the gap left open earlier but some buying/short covering was seen after that. 6
The rand has gained some ground in the past week trading as low as R13.23/$ but the rand has since pulled off that level. Also see the technical graphs below Safex Dec-17 white maize prices CME Dec-17 corn prices 7
Daily MAWZ8 Cndl, MAWZ8, Trade Price 218/7/11, 2 12., 2 115., 2 93., 2 115., -15., (-.7%) SMA, MAWZ8, Trade Price(Last), 1 218/7/11, 2 169.46 SMA, MAWZ8, Trade Price(Last), 4 218/7/11, 2 22.9 SMA, MAWZ8, Trade Price(Last), 9 218/7/11, 2 155.11 SMA, MAWZ8, Trade Price(Last), 2 218/7/11, 2 17.25 217/1/17-218/7/25 (JHB) Price ZAR T 2 3 2 28 2 26 2 24 1 98 Auto RSI, MAWZ8, Trade Price(Last), 14, Wilder Smoothing 218/7/11, 33.418 Value ZAR T 2 22 2 2 2 18 2 16 2 14 2 12 2 1 2 8 2 6 2 4 2 2 2 3 23 3 6 13 2 27 4 11 18 27 2 8 15 22 29 5 12 19 26 5 12 19 26 3 9 16 23 3 7 14 21 28 4 11 18 25 2 9 16 23 October 217 November 217 December 217 January 218 February 218 March 218 April 218 May 218 June 218 July 218 Auto 8
Daily CZ8 Cndl, CZ8, Trade Price, 218/7/11, 358, 359, 356, 357, -4, (-1.11%), SMA, CZ8, Trade Price(Last), 4, 218/7/11, 392, SMA, CZ8, Trade Price(Last), 9, 218/7/11, 364, SMA, CZ8, Trade Price(Last), 1, 218/7/11, 41 217/9/26-218/7/26 (CHG) Price USc Bsh 42 415 41 45 41 4 395 392 39 385 38 375 37 364 365 36 RSI, CZ8, Trade Price(Last), 14, Exponential, 218/7/11, 31.626 357 Auto Value USc Bsh 31.626 3 2 9 16 23 3 6 13 2 27 4 11 18 26 2 8 16 22 29 5 12 2 26 5 12 19 26 2 9 16 23 3 7 14 21 29 4 11 18 25 2 9 16 23 October 217 November 217 December 217 January 218 February 218 March 218 April 218 May 218 June 218 July 218 Auto 9