Maize:
US maize prices closed with losses on Friday and it puts bearish reversals on old and new charts. Despite the sales, the term ended sharply higher and far above the gaps created after Memorial Day. While farmers in Iowa and many of Wisconsin and Minnesota watched the final maize plant dates today for full crop insurance cover, the demand for maize also made headlines. The Trump Administration, as predicted, waived the ban on the entire annual use of E15, at the same time also the market transparency for RINs, a move sought by the petroleum industry. Both movements can cause right-wing challenges that can link the plan in court for the peak summer driving season.
The latest trading news has been obscured, which was actually a decent weekly export sales report for maize on Friday morning. Net new bookings of 983 000 tonnes improved, a total of 76 000 tonnes for old crops. The total has easily passed the pace needed by the end of the marketing year, 31 August, to reach the current USDA forecast for the 2018 crop. Mexico accounts for 30% of US maize sales and transactions this year. Other countries have seen the market, and Brazil looks set to sell a big crop in the coming months. Shipping was also good last week, despite all the river system problems. Lack of sailing movement boosts a less frequent waterway. Grain bumps on Toledo and Burns Harbour, Indiana jumped while relieving the Gulf base and processors also softened.
Local:
The maize prices rose well on Friday. White maize is R94 and closed the day's trading at R2 943. Yellow maize also had a positive day on Friday and closed its trading R88 higher at R2 889.
Soya beans:
US soya beans price closed today with old and new crop contracts lower. All the tariff news was a clumsy stumbling block that the market could not overcome, but the futures held Tuesday's commemorative gaps. To add to the uncertainty, the outlook for the area is difficult to predict. Maize producers are wondering if they should switch to soya beans but are struggling with the decision because they do not know much about USDA's next round rate compensation. In the midst of speculation, those who take out insurance can receive additional help. Yield threat also reduces the production potential of soya beans, although again in some areas the next week or two may improve.
Soya export sales reported about 478 000 tons last week, in line with trade estimates. China has added 136 000 tonnes of new deals, despite reports that it will stop buying yesterday. Another big demand for the market is whether China will deliver on its large purchases, which is 6.939 million tonnes. Soya bean base at the Gulf was flat today. As with maize, bids in Toledo have strengthened and also achieved with processors enjoying good, comfortable margins.
Local:
Soya bean prices did very well on Friday with huge price increases observed and closed trading R152 higher at R51 62.
Wheat:
US wheat prices have also fallen despite a day of trading back and forth. In the end, the 'bears' won and left the back on cards in all three markets. Weather was accompanied by purchases that took prices higher for some time. Heavy rain runs over the next week to parts of the central and southern plain and harvest is already underway in Texas. Today is the end of the 2018 harvest marketing year for wheat. Total sales will not be known for a while, but the latest figures from last week's 566 000 tonnes have made trading expectations as well as last week's total easy. Most of the sales were for new crop, with a total of 2019 crop purchases beginning of the year on a three-year high. However, there is no connection between a good new crop book and how sales ultimately come to the marketing year. The only major trouble in the world is Australia. Prices have risen sharply higher today on three-month El Nino-related drought forecasts.
Local:
Friday's trade was also very positive for winter cereals on local markets. Wheat traded R66 higher on Friday and included trades at R4 492.
Sunflower seed:
The expectation for international sunflower seed production is that it should be about 700 000 tonnes lower in the 2019/20 season than the record levels produced during the 2018/19 season. The total production is estimated at 51.7 million tonnes, which is still good. Production is expected to be lower in Ukraine this season, but lower production is partly eliminated by higher production in other countries. The expectation in the market is also that the carry-over stocks from the 2018/19 season should be a new record which will also limit the effect of the slightly lower production for the 2019/20 season and thus there are no major differences expected in processing of sunflower seed.
Local:
The local sunflower seed market found support last week and traded higher for the week in most of the contract months currently listed.
Canola:
In the global context, there should be record ending stocks of canola at the end of the 2018/19 season, counteracting the effect of possible lower production in terms of price expectations. Production in the EU and Canada should be lower for the season, but this will largely be eliminated by the record expected production in Ukraine and Russia, as well as China and Australia.
Local:
In the local market, most of the canola is already planted for the season and in some areas, it looks good so far while other parts of the production areas still need rain.
Groundnuts:
The available peanut stocks in the US, China and India should be significantly lower than a year ago at the end of the 2018/19 season due to the weaker production in these countries during the 2018/19 season. In Argentina, the peanut production for the 2019/20 season is good and the available stocks will be large in Argentina over the next few months. The new season plantings of groundnuts in the US has progressed well and was not under pressure like other crops. The groundnut plantings are reported to be 79% complete which is better than the average rate at this time of season.
Local:
The local peanut production for the season does not look good as the plantings could not take place optimally. In the latest monthly SAGIS figures, it was indicated that producer deliveries for March and April 2019 are about 15% lower than last season's deliveries at the same time of season.
