Will the Tight Global Grain and Oilseed Supplies have a Notable Impact on SA?
Good Rain, Good Start of the Planting Season
October 29, 2018
The Weather will remain a Key Driver of SA Grains and Oilseed Market until February 2019
October 31, 2018
- Although the 2018/19 maize and soybean production is expected to be up from the previous season, the stocks will be tight due to a decline in wheat production, as well as a general uptick in consumption. Broadly speaking, this means that global grain prices could move sideways to upwards in the near to medium term.
- To dive into the details of the aforementioned summary, the global maize supplies will remain tight despite the expected 3 percent year-on-year improvement in 2018/19 global maize production to 1.07 billion tonnes. This is largely due to the increasing demand from both the animal feed processors and industrial use (ethanol). In the case of animal feed, this could be linked to the expected decline in global wheat production, which has led to an uptick in prices, hence some processors opt for maize as a substitute.
- Overall, this will have minimal implication on the South African maize market as it is well supplied. But the same cannot be said about wheat, as South Africa is a net importer and thereafter exposed to global shocks.
- In this mornings’ note, we explore the global picture of maize, wheat, soybeans and sunflower seed.
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Sourced: Agbiz, Agribusiness Research
