April 2013 - AFMA

surplus above the pipeline should amount
to 777 000 tons. This explains why maize is
currently trading at export price levels. The
projected exports for the current marketing
year amounts to almost 1,3 million tons.
It is interesting to note that white maize
is largely being utilised in the animal feeds
market. During the current marketing year
approximately 642 000 tons of white maize
should be utilised by the animal feed market.
During the previous marketing year
white maize consumption amounted to 1,2
million tons, while in the year before it was
1,66 million tons. Consumption of yellow
maize in the animal feeds market amounts
to 3,6 to 3,7 million tons, while the commercial
supply of yellow maize can amount
to between 4,7 and 4,8 million tons.
Producers have indicated that they will
plant 2,7 million hectares of maize for the
2013/14 marketing year. With an expected
yield of 4,57 tons per hectare, the total production
in 2013/14 should amount to 12,5
million tons. With carry-over stock of almost
1,9 million tons, commercial supply should
amount to approximately 12 million tons in
2013/14.
Considering that the total commercial
consumption amounts to approximately
8,8 million tons, we could expect an end
supply of a substantial 3 million tons on
30 April 2014, once possible exports of 1,4
million have been brought into the calculation.
The end stock of yellow maize should
be between 1,2 and 1,3 million tons on 30
April 2014.
Based on the prospect that local supplies
could build up until the end of April 2014,
maize prices should trade at close to export
parity price levels. Good export figures can,
however, contribute towards a decline in local
stocks and the support of higher prices
above export parity price levels.
Maize prices are mostly the leader of
other price commodities such as soybeans.
The transferred amount of soybeans at the
end of 2012 should amount to approximately
200 000 tons. With the expected
increased soybean planting for 2013, production
at a yield of 1,75 tons per hectare
should amount to approximately 880 000
tons. With provision made for exports of
160 000 tons and an increased consumption
of oil and oilcake at 400 000 tons, the
end supply at the end of December 2013
can amount to approximately 230 000 tons.
The higher local soybean supply can lead to
soybeans also trading at export price levels
by the end of 2013.
The local price of maize and soybeans
should trade at export parity price levels
until the end of the next marketing year. Local
factors that can support South African
prices in trading at higher levels include
the export tempo in the coming marketing
year and weather problems in our production
regions during planting and pollination
seasons.
International factors that can determine
prices include the immediate effect of
rainfall patterns on crop production in
South America and whether sufficient rains
will fall during the US spring season to
supplement underground moisture in the US
production areas. International production
circumstances can recover within six
months, and under these circumstances the
international price of commodities could
decline during the second half of 2013. This
can cause local prices in the second half of
2013 to also drop.
Dr Erhard Briedenhann, MIDS
Regarding the availability of protein sources,
the international situation is the deciding
factor if one wants to summarise the
local situation. It is very important that the
South American soybean crop is successful
so that world supplies can be supported.
World supplies are very low due to poor
yields, especially in America.
Initially there was concern over the
fact that South America will be getting
too much rain, but the current situation is
looking very promising. With regard to international
prices, the current world economy
still has a depressive effect on prices,
despite low global supplies.
In respect of the local situation, we are
expecting (according to the crop estimate)
increased plantings of soy and sunflower.
However, these plantings do not indicate
earth-shattering yields. The new season
nevertheless looks promising for both consumers
and producers of protein seeds.
A matter that also deserves attention is
the increased pressing capacity currently
available in respect of soybeans in the
country. By 2014 we should have a pressing
capacity of two million tons of high
protein soybean oilcake, which could put
the country on the road towards self-sufficiency.
Heiko Köster, feed consultant
In order to determine what the year ahead
holds in store in terms of the availability
of animal feeds, one should view the main
components of animal feed individually.
With regard to maize, we have enough
stock in the country, but due to the fact
that the world supply is under pressure,
prices on the Chicago Board of Trade
(CBOT) will probably remain under pressure.
The current price is in the order of
$7,50 per bushel for March and July. Our
local prices are also high because of the
fact that we are moving around import
parity. Furthermore, the exchange rate will
have a determining influence on the price.
With regard to the new season, prices
will be strongly influenced by the climate.
At the end of the planting season it
seemed as though enough rain had fallen
in the production areas to ensure relatively
wide planting.
Regarding soy oilcake, prices are determined
by import parity. Prices should
remain relatively high up until April/May,
when we should see a drop of up to R800
per ton. Sunflower, on the other hand,
is a cause for concern. Relatively large
amounts are imported, but at high prices.
Other products such as cotton oilcake are
simply following the soy and sunflower
trends.
With regard to by-products such as
broken maize and wheat bran, supplies
are substantially lower than usual due to
low milling figures. Our milling figures reflect
the purchases of human consumers
and it is clear that the economy has had
a negative effect on the consumer’s buying
power. There has also been a change
towards other food types due to the high
maize price.
The lower availability of broken maize
and bran is a problem, especially for the
feedlots. Lower availability means that
prices are higher than usual. Good local
yields can cause the price to drop during
the year and good yields in South America
might even cause prices to drop even further.
On the other hand, American climatic
conditions during May, June and July could
cause relative volatility in the market.
Feed industry
AFMA MATRIX ● APRIL 2013 13