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					Agri-Weekly
05 January 2007
Beef market trends (Graph 1) •
(SA c/kg)

International: Beef prices recovered marginally during December. This combined with a further 2260 weakening in the exchange rate placed upward 2080 pressure on import parity prices. • Domestic: After peeking in December beef prices 1900 continued to slide lower as the effect of higher 1720 interest rates start to impact negatively on the spending power of the consumer. This combined 1540 with a shift in spending, towards more durable 1360 goods placed further pressure on beef prices in 1180 general. 15-Sep-06 27-Oct-06 08-Dec-06 19-Jan-07 • Weaner calf prices declined sharply on the back of Class A Contract lower beef prices as well as feedlots feeling the Class C Weaner calf pinch due to higher maize prices. NZ Cow import parity • Hide prices remained constant despite of a weaker * last two data points are preliminary Rand. OUTLOOK Beef prices are expected to decline even further towards midmonth as demand tapers due to a hangover from the festive season. The weaker Rand will raise the level of protection from imports. Weaner calf prices are expected to continue to slide lower as the exchange rate continues to weaken placing upward pressure on maize prices .

Graph 1: Beef price trends

Mutton market trends (Graph 2) • International: International mutton prices strengthened after reaching seasonal low during December. Import parity prices for mutton however increased substantially due to the combined effect of higher international prices as well a further weakening in the exchange rate . • Domestic: Lamb and mutton prices remained relatively strong beating the downward trend. The potential for imports however remain a problem despite higher international prices OUTLOOK Domestic mutton and lamb prices are expected to soften towards mid month as a result of over spending during the festive season

(SA c/kg) 3,380 3,040 2,700 2,360 2,020 1,680 1,340 1,000
15-Sep-06
Lamb

Graph 2: Mutton price trends

27-Oct-06
Class C

08-Dec-06

19-Jan-07
Contract lamb

NZ Lamb parity
* Last

ZN Mutton parity

two data points are preliminary

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Pork market trends (Graph 3) • International: Pork prices continued to decline. Import parity prices bottomed out and strengthened slightly on the back of a weaker Rand. • Domestic: In spite of a decline in beef prices domestic pork and baconer prices held there ground and moved sideways during December. OUTLOOK Domestic porker and baconer prices are expected to move sideways with some downward potential towards midmonth as volumes increase as factories reopen.

(SA c/kg) 1,730 1,610 1,490 1,370 1,250 1,130 1,010 890 770 650 15-Sep-06

Graph 3: Pork price trends

27-Oct-06

08-Dec-06

19-Jan-07

Porker Import parity
* last two data points are preliminary

Baconer Export parity

Poultry market trends (Graph 4) • International: Poultry prices continued to weaken as chicken was replaced by turkey during the festive season. Import parity prices increased as lower international prices were offset by a softer Rand. Domestic: Lower beef prices continued to place downward pressure on domestic poultry prices with a resulting decline in poultry prices during December.

(c/kg) 1,460 1,380 1,300 1,220 1,140 1,060 980 900 820 740
15-Sep-06

Graph 4: Poultry price trends

•

OUTLOOK It is expected that domestic poultry prices will continue to soften as demand subsides due to consumer being cash strapped after the festive season .

27-Oct-06

8-Dec-06

19-Jan-07

Frozen whole Imported Leg Quarter * last two data points are preliminary

Fresh whole IQF

Producer prices for selected livestock commodities 05 January 2007 Open market: Class A / Porker / Fresh whole birds(R/kg) Open market: Class C / Baconer / Frozen whole birds(R/kg) Contract: A2/A3* / Baconer/ IQF (*includes fifth quarter) (R/kg) Import parity price (R/kg) Weaner Calves / Feeder Lambs (R/kg) Feedlot Hides (R/kg) / Dorper Skins (R/piece) Veldt Hides (R/kg) / (Medium Merino Skins R/piece) Wool and cotton market trends (Graph 5) • International: Cotton prices continued to strengthen, this combined with a further weakening in the exchange rate placed upward pressure on import parity prices. Although international wool prices were slightly stronger, import parity increased substantially due to the softness in the rand. • Domestic: Domestic prices are expected to open stronger than they closed mainly due to currency weakness. Derived cotton lint prices increased substantially on the back of the combined effect of a stronger international price as well as some currency weakness. OUTLOOK It is expected that wool prices will move sideways with some upward potential in some categories due to good international demand and some Rand weakness.
Wool
5940

Beef 19.25 16.56 19.68 13.51 12.18 8.52 7.13

Mutton 31.32 24.91 31.91 13.59 14.01 45 44

Pork 13.9 12.89 13.13 11.64

Poultry 12.30 12.50 12.11 8.28

Graph 5: Cotton & wool price (c/kg) Cotton
1,050 1,000

5580 5220 4860 4500 4140 3780 3420 3060 2700 750 700 850 800 950 900

15-Sep-2006
SA Wool

17-Nov-2006
Aus Wool

19-Jan-2007
Cotton A-Ind

* last two data points are preliminary

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Fibre market prices 05 January 2007 Wool market indicator (R/kg) 19μ medium length wool (R/kg) 23μ medium length wool (R/kg)

SA prices (R/kg) 47.94 * 55.80 * 45.38 * SA derived Cotton (R/kg) 9.55

Cotton Prices (R/kg)
*Previous sale

Australian prices (R/kg) 33.94 * 53.31 * 42.95 * New York A-Index (US$/kg) 1.34

Australian future Feb 2007 (AU$/kg) 9.85 7.95 New York future Mar 2006 (US$/kg) 1.20

Australian future Apr 2007 (AU$/kg) 9.95 8.00 New York future May 2007 (US$/kg) 1.22

Yellow maize market (Graph 6) • International: US yellow maize prices eased modestly lower during the festive season, this was mainly due to improved crop reports that production conditions in Brazil and Argentina remained relatively good. In spite of lower international prices, import parity prices remained fairly stable as lower international prices were offset by a weaker exchange rate. • Domestic: Yellow maize prices softened substantially during the past three weeks as domestic production conditions improved. OUTLOOK Domestic yellow maize prices are expected to move sideways with further downward potential given the uncertainty regarding lower international prices. Prices will however remain sensitive to weather conditions in the growing areas.

(R/ton) 2100 1900 1700 1500 1300 1100 900 700 500
15-Sep-06

Graph 6: Yellow maize prices

27-Oct-06

08-Dec-06
Export parity

19-Jan-07
Domestic

Import parity
* last two data points are preliminary

Yellow Maize Futures Mar-07 May-07 Jul-07 Sep-07 Dec-07 05 January 2007 CBOT ($/t) 160.65 163.02 158.21 155.77 158.45 SAFEX (R/t) 1505 1290 1253 1273 Calculated Yellow Maize Options prices (R/ton) RMB commodity desk (Tel: 011 269 9005) Mar-07 May-07 Juy-07 Ask Put Call Ask Put Call Ask Put Call 1,540 86 51 1,340 85 35 1,300 137 90 1,500 64 69 1,300 61 51 1,260 114 107 1,460 46 91 1,260 42 72 1,220 93 126

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White maize market trends (Graph 7) • International: Unlike yellow maize, US white maize prices moved marginally higher. This combined with a weaker exchange placed upward pressure on import and export parity prices. • Domestic: White maize prices however declined substantially during December as planting conditions improved and farmers were able to plant. OUTLOOK It is expected that prices will remain under pressure till more certainty can be obtained in terms of the hectareage planted. The weather will however continue to be a dominating factor in determining market direction.

(R/ton) 2100
1900 1700 1500 1300 1100 900 700 500 300
15-Sep-2006

Graph 7: White maize prices

17-Nov-2006

19-Jan-2007

Import parity
* last two data points are li i

Export parity

Domestic

White Maize Futures Mr-07 May-07 Jul-07 Sep-07 05 January 2007 SAFEX (R/t) WM1 1282 1288 1263 1284 SAFEX (R/t) WM2 1250 Calculated White Maize Options prices (R/ton) RMB commodity desk (Tel: 011 269 9005) Mar-07 May-07 Juy-07 Ask 1,320 1,280 1,240 Put 97 74 55 Call 59 76 97 Ask 1,320 1,280 1,240 Put 116 93 74 Call 84 101 122 Ask 1,300 1,260 1,220 Put 152 130 109

Dec-07 -

Call 115 133 152

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Wheat market trends (Graph 8) • International: Despite of a further weakening in the exchange rate import and export parity prices continued to decline as volumes in the international market increased. This is mainly due to improvements in production conditions in Australia as well as US. • Domestic: Give the expectations of a bumper crop in the Western Cape and Eastern Free State domestic prices declined in tandem with that of import parity prices. Grade problems are however of some concern given the rains of late during the harvesting period. OUTLOOK Domestic wheat prices are expected to move sideways with some upward potential.

(R/ton) 2500 2300 2100 1900 1700 1500 1300 1100 900 700 500
15-Sep-2006

Graph 8: Wheat price trends

17-Nov-2006

19-Jan-2007

Import parity
* last two data points are preliminary

Export parity

Domestic

Wheat Futures 05 January 2007 KCBT ($/t)

Mar-07 189.41

May-07 187.57

Jul-07 189.78

Sep-07 192.35

Dec-07 Juy-07

SAFEX (R/t) 1784 1800 1826 Calculated Wheat Option prices (R/ton) RMB commodity desk (Tel: 011 269 9005) Mar-07 Ask 1,820 1,780 1,740 Ask 78 55 37 Put 42 59 81 Call 1,840 1,800 1,760 May-07 Put 112 90 70 Call 72 90 110 Ask 1,880 1,840 1,800 Put 1257 1224 1191

Call 1203 1210 1217

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Oilseed market trends (Graph 9) • International: Soya oil and oilcake prices continued to strengthen as the demand for biodiesel increase, placing upward pressure on oilseed prices. This combined with a weaker exchange rate placed upward pressure on import parity prices. Domestic: The domestic soybean and sunflower prices continued to strengthen on the back of higher import parity prices as well as some concerns over deteriorating planting conditions.
(R/ton) 2800
2660 2520 2380 2240 2100 1960 1820 1680 15-Sep-2006
Derived Soya Sunflower-spot
* last two data points are

Graph 9: Derived Oilseed prices

•

OUTLOOK Domestic sunflower and soybeans prices are expected to continue to strengthen on the back of a weaker exchange rate. Prices will however remain sensitive to changes in production conditions. Oilseeds Futures 05 January 2007

17-Nov-2006

19-Jan-2007
Derived Sunflower Soya-spot

Mar-07

May-07

Jul-07

Sep-07

Dec-07 279.23 30.62 208.50 -

CBOT Soybeans (US $/t) 262.47 267.32 271.73 274.82 CBOT Soya oil (US c/lb) 28.80 29.27 29.74 30.05 CBOT Soya cake meal (US $/t) 195.90 199.20 202.20 205.50 SAFEX Soybean seed (R/t) 2200 2200 2195 2170 SAFEX Sunflower seed (R/t) 2494 2456 2471 Calculated Sunflower Options prices (R/ton) : RMB commodity desk (Tel: 011 269 9005) Mar-07 May-07 Juy-07 Ask Ask Put Call Put Call Ask Put 2,540 117 71 2,500 168 124 2,520 208 2,500 94 88 2,460 146 142 2,480 185 2,460 74 108 2,420 125 161 2,440 164

Call 159 176 195

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Vegetable market trends (Graph 10) (R/ton) Graph 10: Fresh produce vegetable prices • Potatoes 4100 Potato prices have recovered substantially during the festive season after being on a downward 3600 trend since August 2006. This was mainly due to lower volumes as a result of the summer holiday. 3100 It is expected that prices will hold and move 2600 sideways till production volumes increase. • Cabbage 2100 The average monthly price for cabbages in November 2006 was R771/ ton, down 1.1% 1600 compared to October. However, considered year on year the November 2006 cabbage price was 1100 9.5% higher than the corresponding month in 600 2005. Volumes were 4% lower compared to the 15-Sep-2006 17-Nov-2006 19-Jan-2007 previous month and were 12.4% lower when Tomatos Potatoes Onions compared to November 2005. Cabbage prices Carrots Cabbage have traded sideways for most of the year. It is * last two data points are preliminary expected that this trend will continue in 2007. • Carrots As with potatoes and onions, carrot prices increased substantially due to lower volumes on the market and slightly higher demand over the festive period. It is expected that prices will hold at current levels and move sideways • Onions The average price of onions was substantially higher due to good demand and lower volumes. It is expected that prices will holed there position and move sideways. • Tomatoes In the case of tomatoes, prices declined substantially during December as seasonal production volumes increase. Unlike potatoes, carrots and onions, the shelf life of tomatoes is relatively short with harvesting gain momentum as the production season peeks. It is expected that prices will continue to decline although not to the same rate as early in December. Vegetable prices (Average Pretoria, Johannesburg, Cape Town, Durban, Port Elizabeth) Week ending Average Total 05 January 2007 Price (R/t) Volume (t) Tomato R 2,628.49 2,933.00 Potato R 1,903.75 8,564.00 Onion R 1,788.75 2,155.00 Carrot R 2,483.75 827.00 Cabbage R 881.76 817.00

Disclaimer: Although everything has been done to ensure the accuracy of the information, the Bank takes no responsibility for actions or losses that might occur due to the usage of this information.

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