{"id":981,"date":"2018-12-12T14:16:31","date_gmt":"2018-12-12T14:16:31","guid":{"rendered":"http:\/\/commodityconversations.com\/wordpress2\/?p=981"},"modified":"2018-12-12T14:16:31","modified_gmt":"2018-12-12T14:16:31","slug":"agricensus-report-3","status":"publish","type":"post","link":"https:\/\/commodityconversations.com\/wordpress2\/2018\/12\/12\/agricensus-report-3\/","title":{"rendered":"AgriCensus Report"},"content":{"rendered":"

Drought, currency & El Nino combine to panic South Africa\u2019s corn market<\/h3>\n

South Africa\u2019s domestic corn prices have spiked as fears mount over the impact of dry weather during the critical planting period and as the country\u2019s currency depreciates on the international market, sources have told Agricensus Tuesday.<\/p>\n

The move is enough to again bring the country close to import parity and has seen limits applied to trading on the Johannesburg Stock Exchange\u2019s corn futures contract.<\/p>\n

\u201cThings are not looking great on the weather this side, the market is in a bit of a panic,\u201d one trading source said, as rains that were expected in the last few weeks have failed to materialise.<\/p>\n

\u201cIt is still early days, but the optimistic outlook at the opening of the season has changed,\u201d Wandile Sihlobo, head of agribusiness intelligence at South Africa\u2019s agricultural business chamber, said in a note and the dryness hampering planting could shave 5% off the country\u2019s corn crop.<\/p>\n

Sihlobo currently expects the corn crop to come in at around 12.2 million mt, with the USDA forecasting production of 12 million mt.<\/p>\n

El Nino<\/strong><\/p>\n

However, the anticipation of an El Nino weather pattern forming through the latter stages of 2018 and beginning of 2019, which typically brings less rainfall to South Africa, is also fostering fears for the coming key crop development stages.<\/p>\n

“There are fears of an El Nino later in the 2019 summer season… this implies that the summer crop growing areas could experience more acute dryness from the end of February,” Sihlobo said.<\/p>\n

Worries around planting progress \u2013 with some states already out of the optimal planting window \u2013 have also driven domestic fears, with the December and March corn futures contract seeing trading suspended as prices surged through the daily limit.<\/p>\n

According to JSE data, the March contract rose by ZAR100\/mt ($5.60\/mt) on both Friday and Monday, for the first time since early 2017, to reach ZAR2,776\/mt ($193.29\/mt) at Monday\u2019s close with the December contract climbing even more sharply to ZAR2,789\/mt ($194.19\/mt).<\/p>\n

On December 4, the March contract had ended at ZAR2,470\/mt, and December at ZAR2,393\/mt.<\/p>\n

\u201cWe\u2019re very close to booking yellow corn shipments for imports in March,\u201d the trading source said, with Agricensus assessing Argentina FOB Up River corn prices at $171.75\/mt, while sources put freight at around $30\/mt.<\/p>\n

\u201cWhite maize prices are higher on the back of a lack of rain and of course the weakening rand,\u201d an email from the JSE said, with the rand moving from around 13.691 to the US dollar on December 3, to reach 14.385 against the dollar by December 10.<\/p>\n

The higher prices may encourage farmers to plant later into the season, however, as they try and capitalise on the increase and amid hopes that rains will come in the days ahead.<\/p>\n

\u201cIf we only plant 65% at an average yield, we should have enough stock,\u201d the source said, with the country already seeing a build in stocks as exports have slowed.<\/p>\n

\u201cIf prices stay at these levels, we could expect farmers planting deep into January, if they receive rain”.<\/p>\n

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\"AgriCensus\"<\/a><\/p>\n

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AgriCensus Prices<\/strong><\/a>
\nOver 500 daily Spot Marker and Forward Curve price assessments for wheat, corn, soy, barley, vegoils, meals and seeds.<\/td>\n		Subscribe now<\/strong><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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