Unigrain (Pty) Ltd
WEEKLY OILSEED REPORT
Tel. No. : +27 11 692 4400
Fax. No. : +27 11 412 1183
08 JUNE 2017
INTERNATIONAL MARKET
Table 1: CME Soybean prices and weekly change (cents/bushel)
Weekly change
Currently
01/06/2017
(c/bu)
CME Jul-17
935 ¾
912 ¼
23 ½
CME Nov-17
940 ¾
917 ¾
23



Monthly change
(c/bu)
-29
-20 ½
From the table above we see that US soybean prices posted some gains in the past
week with the majority of the gains seen in the past 2 trading sessions. On a monthly
basis US soybean prices are still trading lower with July and November soybeans
ending 3.0% and 2.1% lower in the past month respectively.
On the technical chart for July CME soybeans we see that the market tested the
$9.10/bushel support levels on several occasions but the failure to break below that
level resulted in some short covering/technical buying. The market has since posted
some good gains breaking above the 9-day average and resistance is seen at $9.40
and at the 40-day average seen at $9.53/bushel. The indicators are pulling higher
which could provide some more support to US soybean prices.
US soybeans did get some support from the spillover strength from the higher US
maize and wheat prices seen in the past few sessions. There are also some concerns
that the warmer and drier conditions in the US Midwest could stress some of the newly
planted crops.
The USDA released their weekly crop progress and conditions report earlier this week. In the
USDA progress report we did see that:

The USDA in their weekly crop progress and conditions report indicated that 83% of the
US soybean crop has been planted which is up from the 67% planted in the previous
week. The current planting progress is slightly ahead of the 5-year average seen for
this time of the year. The USDA in their report also indicated that 58% of the US
soybean crop has emerged which is in line with the 5-year average. Figure 1 below
presents the US soybean planting progress seen this time of the year in the past few
seasons.
Figure 1: US soybean planting progress (% complete)
100
90
90
89
94
88
80
84
69
70
78
83
2016
2017
71
68
66
83
57
60
50
40
30
20
10
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
The weather forecast for the US Midwest in the week ahead expects dry weather conditions for
most of the key soybean and maize producing areas of the US in the week ahead. The drier
weather forecasted has been a supportive factor for summer grains in the US. The temperature
forecast for the week ahead expects mostly normal temperatures in the US Midwest while the
6-10 day forecast expects above normal temperatures.
Although everything has been done to ensure the accuracy of the report Unigrain (Pty) Ltd cannot be held responsible for any
losses incurred as a result of the use of the information contained in the report
“Together we make a difference”
Figure 2: Cumulative rainfall forecast for week ahead
In the US soybean export market we did see some more interest for US soybeans in the global
market in the past week with the USDA also announcing several private export sales. The
weaker dollar seen recently could also help to support US soybean exports. However the US
will and is facing massive competition out of South America given their record soybean crops.
Figure 3 below presents the US soybeans committed for exports this time of the year in the
past few seasons. From the graph below we see that the cumulative soybeans committed for
exports in the 2016/17 season is well above the commitments seen in the past few seasons.
The soybeans committed in 2016/17 represents 105% of the USDA export estimate which
higher than the 5-year average for this time of the year.
Figure 3: US soybean export progress (1000 tons)
60000
110
105
50000
100
40000
95
30000
90
85
20000
80
10000
75
0
70
12/13
13/14
14/15
Exports commitments date (1000 tons)
15/16
16/17
% of total exports (RHS)
The next data release for the US and world soybean market will be the USDA supply and
demand estimates due to be released on Friday. Looking ahead at the report we see that:

The average market expectation of the US 2016/17 US soybean ending stocks is seen
at 433 million bushels which is only marginally lower than the 435 million bushels seen
in the May USDA estimate. The US new crop 2017/18 soybean ending stocks is
estimated at 485 million bushels which is up from the May estimate seen at 480 million
bushels. Figure 4 below presents the US soybean ending stocks with the estimates
based on the market expectations presented above. From the graph below we see that
the 2017/18 US soybean ending stocks estimate could be the largest stock estimate
since 2006/07.
Although everything has been done to ensure the accuracy of the report Unigrain (Pty) Ltd cannot be held responsible for any
losses incurred as a result of the use of the information contained in the report
“Together we make a difference”
2
Figure 4: US soybean ending stocks (million bushels)
700
600
500
400
300
200
100

17/18
16/17
15/16
14/15
13/14
12/13
11/12
10/11
09/10
08/09
07/08
06/07
05/06
04/05
03/04
02/03
01/02
00/01
0
The market will also closely follow the USDA estimates for the South American
soybean crop. The average market expectation of the Argentine soybean crop is seen
at 57.40 million tons which is up from the previous USDA estimate seen at 57 million
tons. The average market expectation of the Brazilian soybean crop is seen at 112.24
million tons compared to the May USDA estimate seen at 111.60 million tons. Figure 5
below presents the Argentine and Brazilian soybean crops in the past few seasons.
Figure 5: Argentina and Brazil soybean production
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
Argentina
Brazil
LOCAL OILSEED MARKET
Figure 6 presents the Safex Jul-17 sunflower seed and soybean prices in the past few months.
From the graph below we see that South African oilseed prices traded lower in the past week
despite the gains seen in US soybeans the past 2-3 trading sessions. The gains in our market
were limited by the stronger rand with the rand trading around R12.90/$ the same time last
week. South African sunflower seed and soybean contracts for July ended 1.82% and 0.10%
lower in the past week respectively. The harvesting of the South African sunflower seed and
soybean crops is also weighing on the market.
Although everything has been done to ensure the accuracy of the report Unigrain (Pty) Ltd cannot be held responsible for any
losses incurred as a result of the use of the information contained in the report
“Together we make a difference”
3
Figure 6: Safex July sunflower seed and soybean prices
6500
6000
5500
5000
4500
July Soybeans
17/05/25
17/05/11
17/04/27
17/04/13
17/03/30
17/03/16
17/03/02
17/02/16
17/02/02
17/01/19
17/01/05
16/12/22
16/12/08
16/11/24
16/11/10
16/10/27
16/10/13
16/09/29
16/09/15
16/09/01
16/08/18
16/08/04
16/07/21
4000
July Sunflower seed
Figure 7 below presents the Safex July sunflower seed/soybean spread seen in the past few
months. From the graph below we see that the spread has been under pressure from the highs
seen around R600/ton in March to the current levels of around parity. The narrowing of the
spread is an indication that soybean contracts gave up significantly more ground than the
sunflower seed market with the massive South African soybean crop also weighing on the
market.
Figure 7: South African sunflower/soybean spread
16/12/01
16/12/08
16/12/15
16/12/22
16/12/29
17/01/05
17/01/12
17/01/19
17/01/26
17/02/02
17/02/09
17/02/16
17/02/23
17/03/02
17/03/09
17/03/16
17/03/23
17/03/30
17/04/06
17/04/13
17/04/20
17/04/27
17/05/04
17/05/11
17/05/18
17/05/25
17/06/01
800
700
600
500
400
300
200
100
0
-100
-200
-300
Based on the Sagis monthly data and the latest CEC estimates we look at the supply and
demand estimates for South African oilseeds in the section below. Starting with the South
African sunflower seed market we see that:



In the 2017/18 season we start with opening stocks of 163 154 tons and our estimates
are based on the CEC sunflower seed crop estimate of 853 470 tons. Still on the
supply side we opted for zero sunflower seed imports in the 2017/18 marketing season.
On the demand side we estimated the total sunflower seed demand at 850 000 tons
which is well above the 713 000 tons seen in the previous season. Our demand side
estimate is close to the total sunflower seed demand seen in the 2014/15 marketing
season.
With all of this in mind the South African sunflower seed ending stocks at the end of
February 2018 is estimated at 166 624 tons which is very much in line with the ending
stocks seen at the end of the 2016/17 sunflower seed marketing season. Sunflower
seed stocks remain elevated.
Although everything has been done to ensure the accuracy of the report Unigrain (Pty) Ltd cannot be held responsible for any
losses incurred as a result of the use of the information contained in the report
“Together we make a difference”
4
Table 2: South African sunflower seed situation (Marketing season Mar-Feb)
2014/15
2015/16
Sunflower opening stock
47122
92933
Sunflower seed deliveries
833165
663700
Imports
63180
36064
Total supply
943467
792697
Projected consumption season
850534
746800
Ending stocks surplus/(deficit)
92933
45897
Area
598950
576000
Yield
1.39
1.15
2016/17
45897
759614
70643
876154
713000
163154
718500
1.06
2017/18
163154
853470
0
1016624
850000
166624
635750
1.34
Table 3 below presents the supply and demand estimates for soybeans in South Africa. From
the table below we see that:



In the 2017/18 marketing season we start with 84 681 tons of opening stocks. Our
supply side estimates are based on the CEC crop estimate of 1.233 million tons
although we assume that 35 000 tons of soybeans will be retained on farms.
On the demand side the total soybean demand in the 2017/18 marketing season is
estimated at 1.150 million tons which is well above the 982 350 tons seen in the
st
previous season. However the demand has been rather depressed in the 1 2-months
and we need the demand side to gain some momentum. Still on the demand side we
also included soybean exports of 10 000 tons which is up from the 6 745 tons exported
in the previous season.
Based on all of this the South African soybean ending stocks at the end of February
2018 is estimated at 122 811 tons which could be at new record levels for the South
African market. There is also room for potentially more soybean exports.
Table 3: South African soybean situation (Marketing season Mar-Feb)
2014/15
2015/16
Soybean opening stock
61807
63705
Soybean producer deliveries*
919723
1042130
Imports
102977
124981
Total supply
1084507
1230816
Soybeans processed for local market
1020226
1137000
SA Soybean exports
576
4700
Ending stocks surplus/(deficit)
63705
89116
Area
502900
687300
Yield
1.83
1.52
* Actual producer deliveries lower due to soybeans retained for seed purposes
2016/17
89116
713660
271000
1073776
982350
6745
84681
502800
1.47
2017/18
84681
1198130
0
1282811
1150000
10000
122811
573950
2.09
FOCUS FOR THE WEEK



US soybean contracts posted some gains in the past week with the majority pf the
gains seen in the past 2-3 trading sessions. Some technical buying, investment fund
short covering and the spillover gains from the higher US maize and wheat prices
added some support.
The gains in the market will probably be limited by the massive record soybean crop
out of South America and the record area planted in the US. The weather forecast for
the US expects slightly drier conditions in the week ahead. Temperatures are expected
to warm up from this coming weekend.
On the technical chart we see that US soybean prices found support around $9.10 and
pushed higher after that breaking above some of the short term averages. Resistance
is seen at $9.40 and $9.52/bushel.
Although everything has been done to ensure the accuracy of the report Unigrain (Pty) Ltd cannot be held responsible for any
losses incurred as a result of the use of the information contained in the report
“Together we make a difference”
5


South African oilseed prices did end slightly lower in the past week with sunflower seed
contracts leading the way lower. The rand is stronger week/week which together with
the harvesting of local oilseeds pressured our market.
South African market is building stocks for sunflower seed and soybeans despite the
expected year in year increase in consumption which could limit some of the gains in
our market.
Technical graphs

Safex Jul-17 soybean prices

CME Jul-17 soybean prices
Although everything has been done to ensure the accuracy of the report Unigrain (Pty) Ltd cannot be held responsible for any
losses incurred as a result of the use of the information contained in the report
“Together we make a difference”
6
Daily SOYN7
2016/10/24 - 2017/06/20 (JHB)
Cndl, SOYN7, Trade Price
2017/06/07, 4 625.00, 4 640.00, 4 545.00, 4 545.00N/A, N/A
SMA, SOYN7, Trade Price(Last), 9
2017/06/07, 4 545.09
SMA, SOYN7, Trade Price(Last), 40
2017/06/07, 4 774.17
SMA, SOYN7, Trade Price(Last), 100
2017/06/07, 5 229.45
Price
ZAR
T
6 100
6 000
5 900
5 800
5 700
5 600
5 500
5 400
5 300
5 200
5 100
5 000
4 900
4 800
4 700
4 600
4 500
Auto
MACD, SOYN7, Trade Price(Last), 12, 26, 9, Exponential
2017/06/07, -90.11, -93.32
Value
ZAR
T
Auto
RSI, SOYN7, Trade Price(Last), 14, Wilder Smoothing
2017/06/07, 38.132
Value
ZAR
T
Auto
24
31
Oct 16
07
14
21
November 2016
28
05
12
19
28
December 2016
03
09
16
23
January 2017
30
06
13
20
February 2017
27
06
13
20
March 2017
27
03
10
18
24
April 2017
02
08
15
22
May 2017
29
05
12
19
June 2017
“Together we make a difference”
7
Daily SN7
2016/07/28 - 2017/06/23 (CHG)
Cndl, SN7, Trade Price, 2017/06/08, 930.75, 936.00, 930.75, 934.50, +3.75, (+0.40%), SMA, SN7, Trade Price(Last), 40, 2017/06/08, 953.41, SMA, SN7, Trade Price(Last), 9, 2017/06/08, 922.17, SMA, SN7, Trade Price(Last), 100, 2017/06/08, 998.75
Price
USc
Bsh
1 070
1 060
1 050
1 040
1 030
1 020
1 010
1 000
998.75
990
980
970
960
953.41
950
940
934.50
930
922.17
920
910
Auto
MACD, SN7, Trade Price(Last), 12, 26, 9, Exponential, 2017/06/08, -11.26, -11.37
Value
USc
-11.26
Bsh
-11.37
Auto
RSI, SN7, Trade Price(Last), 14, Exponential, 2017/06/08, 51.810
Value
USc
51.810
Bsh
Auto
01
08
15 22
Aug 16
29
06 12
19 26
Sep 16
03
10
17 24
Oct 16
31
07
14 21 28
Nov 16
05
12 19 27 03 09 17 23
Dec 16
Jan 17
30
06
13 21 27
Feb 17
06
13 20 27
Mar 17
03
10 17 24
Apr 17
01
08
15 22
May 17
30 05
12 19
Jun 17
“Together we make a difference”
8