Voluntary Report - public distribution

Date: 1/31/2006

GAIN Report Number: SF6004

SF6004

South Africa, Republic of

Grain and Feed

Monthly Update

2006

Approved by:

![](media/image1.wmf)Scott Reynolds

#### **U.S. Embassy, South Africa**

Prepared by:

Herman Germishuis

Report Highlights:

South Africa\'s grain industry is going through dramatic changes brought
about by the advent of the free market. The total area planted to summer
crops in 2005 dropped by 34% and the area planted to corn dropped by 45%
mainly due to a voluntary area cutback brought about by low prices. As a
result a corn crop of 6.5 million tons is expected compared to the 11.7
million tons produced by the crop planted in 2004. This will change
South Africa from a 2 million ton exporter in 2005/06 to a net importer
in 2006/07.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Pretoria \[SF1\]

\[SF\]

Summary

South Africa\'s grain industry is going through dramatic changes brought
about by the advent of the free market. The total area planted to summer
crops in 2005 dropped by 34% and the area planted to corn dropped by 45%
mainly due to a voluntary area cutback brought about by low prices. As a
result a corn crop of 6.5 million tons is expected compared to the 11.7
million tons produced by the crop planted in 2004. This will change
South Africa from a 2 million ton exporter in 2005/06 to a net importer
in 2006/07.

US\$1 = Rand 6.00 (01/30/06)

[**www.sagis.org.za**](http://www.sagis.org.za/)

**[www.grainsa.co.za]{.underline}**

**[www.safex.co.za]{.underline}**

**[www.fews.net]{.underline}**

**[www.wfp.org]{.underline}**

#### **CORN**

  ------------------- --------- --------- --------- ---------- --------- ----------
  PSD Table                                                              

  Country             South                                              
                      Africa                                             

  Commodity           Corn                                               

  1000 HA             2003      Revised   2004      Estimate   2005      Forecast

  1000 MT             USDA      Post      USDA      Post       USDA      Post
                      \[Old\]   \[New\]   \[Old\]   \[New\]    \[Old\]   \[New\]

  Market Year Begin             05/2004             05/2005              05/2006

  Area Harvested      3300      3240      3223      3223       2600      1950

  Beginning Stocks    2443      2420      2956      2935       3572      3000

  Production          9700      9710      11716     11715      7500      6500

  TOTAL Mkt. Yr.      219       222       150       270        200       600
  Imports                                                                

  Oct-Sep Imports     495       553       131       140        200       270

  Oct-Sep Import U.S. 61        62        0         4          0         0

  TOTAL SUPPLY        12362     12352     14822     14920      11272     10100

  TOTAL Mkt. Yr.      729       773       2300      2000       1000      450
  Exports                                                                

  Oct-Sep Exports     797       449       1517      1187       1500      1200

  Feed Dom.           4077      4040      4300      4300       4200      4400
  Consumption                                                            

  TOTAL Dom.          8677      8644      8950      9920       8900      8950
  Consumption                                                            

  Ending Stocks       2956      2935      3572      3000       1372      700

  TOTAL DISTRIBUTION  12362     12352     14822     14920      11272     10100
  ------------------- --------- --------- --------- ---------- --------- ----------

## **Production**

In early December 2005 the National Crop Estimates Committee finally
revised the 2004 area planted and production figures for the commercial
corn crop. The revisions were based on the SAGIS delivery figures as
well as a utilization survey done by the National Department of
Agriculture. The following table compares the revised figures to the
preliminary 2005 forecast:

+------------+------------+-----------+---------------+--------------+
| Commercial | FAS 2004   |           | Preliminary   |              |
|            |            |           | FAS 2005      |              |
| Production | Revised    |           |               |              |
|            | final      |           |               |              |
| 1000 MT    |            |           |               |              |
+------------+------------+-----------+---------------+--------------+
| MY 2005/06 | Area       | P         | Area planted  | Production   |
|            | planted    | roduction |               | est.         |
+------------+------------+-----------+---------------+--------------+
|            | 1,000 ha.  | 1,000 MT  | 1,000 ha.     | 1,000 MT     |
+------------+------------+-----------+---------------+--------------+
| White corn | 1 700      | 6 541     | 954           | 3 700        |
+------------+------------+-----------+---------------+--------------+
| Yellow     | 1 110      | 4 909     | 594           | 2 550        |
| corn       |            |           |               |              |
+------------+------------+-----------+---------------+--------------+
| Total      | 2 810      | 11 450    | 1 548         | 6 250        |
+------------+------------+-----------+---------------+--------------+

The revision does not clear up the doubts about the true size of the
2004 commercial crop as deliveries up to the end of November only
amounted to 10 million tons, implying farm retentions of 1.45 million
tons, about one million tons more than the norm. This explains the high
consumption figure shown in the PS&D above.

The 2005 crop is causing more concern. At the end of October a survey
showed that the intention was to cut the new season's area planted by
about 50%. A preliminary area estimate done in mid January indicated
that the decrease in area planted amounted to 45% and that the total
area planted on commercial farms only amounted to 1.55 million hectares,
the lowest total in eighty years. The voluntary cutback in production
was advocated by Grain SA to alleviate the oversupply and support better
prices. In addition to price pressure, the early part of the planting
season was very hot and dry and planting was delayed. Rainfall has
improved since then and the January rainfall to date has been favorable.

The preliminary estimate of the total area currently planted to summer
grain crops on commercial farms in 2005 compare as follows to the area
planted in 2004:

+-----------------+-----------------+-----------------+-----------------+
| Area planted    | 2004            | 2005            | \% Change       |
|                 |                 |                 |                 |
| '000 ha.        |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| White corn      | 1 700           | 954             | -44%            |
+-----------------+-----------------+-----------------+-----------------+
| Yellow corn     | 1 110           | 594             | -46.5%          |
+-----------------+-----------------+-----------------+-----------------+
| Total corn      | 2 810           | 1 548           | -45%            |
+-----------------+-----------------+-----------------+-----------------+
| Sorghum         | 87              | 27              | -69%            |
+-----------------+-----------------+-----------------+-----------------+
| Peanuts         | 40              | 44              | +10.5%          |
+-----------------+-----------------+-----------------+-----------------+
| Sunflower       | 460             | 492             | +7%             |
+-----------------+-----------------+-----------------+-----------------+
| Soy beans       | 150             | 208             | +39%            |
+-----------------+-----------------+-----------------+-----------------+
| Dry beans       | 49              | 55              | +12%            |
+-----------------+-----------------+-----------------+-----------------+
| Total           | 3 596           | 2 374           | -34%            |
+-----------------+-----------------+-----------------+-----------------+

The table implies that commercial farmers planted 1.2 million ha. or 34%
less land to the traditional summer crops than in 2004. Increased
plantings are shown for some of the crops but the area involved is small
compared to corn. The area planted to corn declined by 1.26 million ha.
to 1.55 million compared to 2.8 million ha. in 2003 and 2004 and 3.2
million in 2002. This means that the current area planted to corn is
less than half the area planted in 2002. It may be that some additional
plantings were done after the 2005 survey was completed.

It is interesting to see where the cutback apparently occurred; the
following table shows the area planted by province:

+-----------+--------+---------+--------+--------+---------+--------+
| Area      | 2004   | Yellow  | Total  | 2005   | Yellow  | Total  |
| planted   |        |         |        |        |         |        |
|           | White  |         |        | White  |         |        |
| '000 HA   |        |         |        |        |         |        |
+-----------+--------+---------+--------+--------+---------+--------+
| Free      | 660    | 385     | 1045   | 350    | 193     | 543    |
| State     |        |         |        |        |         |        |
|           |        |         |        |        |         | (-48%) |
+-----------+--------+---------+--------+--------+---------+--------+
| N.West    | 680    | 215     | 895    | 355    | 118     | 473    |
|           |        |         |        |        |         |        |
|           |        |         |        |        |         | (-47%) |
+-----------+--------+---------+--------+--------+---------+--------+
| M         | 224    | 336     | 560    | 154    | 182     | 336    |
| pumalanga |        |         |        |        |         |        |
|           |        |         |        |        |         | (-40%) |
+-----------+--------+---------+--------+--------+---------+--------+
| Gauteng   | 60     | 56      | 116    | 49     | 25      | 74     |
+-----------+--------+---------+--------+--------+---------+--------+
| Kwazulu   | 35     | 46      | 81     | 32     | 26      | 58     |
+-----------+--------+---------+--------+--------+---------+--------+
| N. Cape   | 3      | 47      | 50     | 2      | 31      | 33     |
+-----------+--------+---------+--------+--------+---------+--------+
| Limpopo   | 34     | 10      | 44     | 10     | 7       | 17     |
+-----------+--------+---------+--------+--------+---------+--------+
| E. Cape   | 4      | 16      | 17     | 3      | 10      | 13     |
+-----------+--------+---------+--------+--------+---------+--------+
| W. Cape   | 0      | 2       | 2      | 0      | 3       | 3      |
+-----------+--------+---------+--------+--------+---------+--------+
| Total     | 1700   | 1110    | 2810   | 954    | 594     | 1548   |
+-----------+--------+---------+--------+--------+---------+--------+

The Free State, North West and Mpumalanga are the main production areas.
The cutback of 500,000 ha. in the Free State means a loss of nearly two
million tons at last year's average yield of 3.9 MT/ha. The 420,000 ha.
cutback in the North West translates into a loss of 1.35 million tons at
last year's yield of 3.2 MT/ha. The 224,000 ha. not planted in
Mpumalanga implies a loss of 1.1 million tons at last season's yield of
5 MT/ha. The voluntary set aside was less successful in Mpumalanga where
the rainfall arrived in time but some of the cutback in the Free State
and North West may be due to very late rains. The late planting is
another reason why the 2004 yields are not likely to be achieved again
this season while the possibility of early frosts hang over the eastern
production areas. On the other hand yields have been improving over the
past few seasons, mainly due to favorable weather and technological
improvements, but the area cutback implies that marginal soils are no
longer cultivated and only the high potential soils are planted leading
to the high yields.

A production forecast based on normal rainfall from now on follows:

+----------+---------+------+----------+----------+------+----------+
| Co       | 2004    | Y    | Pr       | 2005     | Y    | Pr       |
| mmercial | area    | ield | oduction | area     | ield | oduction |
|          | planted |      |          |          |      |          |
|          | '000    | M    | 20       | planted  | M    | 2005,    |
|          | ha.     | T/ha | 04,final | '000 ha. | T/ha | forecast |
|          |         |      | revision |          |      |          |
|          |         |      | '000 MT  |          |      | '000 MT  |
+----------+---------+------+----------+----------+------+----------+
| White    | 1,700   | 3.8  | 6,540    | 954      | 3.9  | 3,700    |
| corn     |         |      |          |          |      |          |
+----------+---------+------+----------+----------+------+----------+
| Yellow   | 1,110   | 4.4  | 4,910    | 594      | 4.3  | 2,550    |
+----------+---------+------+----------+----------+------+----------+
| Total    | 2,810   | 4.1  | 11,450   | 1,548    | 4.0  | 6,250    |
+----------+---------+------+----------+----------+------+----------+
| De       |         |      |          |          |      |          |
| veloping |         |      |          |          |      |          |
+----------+---------+------+----------+----------+------+----------+
| White    | 325     | 0.6  | 203      | 326      | 0.6  | 200      |
+----------+---------+------+----------+----------+------+----------+
| Yellow   | 88.5    | 0.7  | 63       | 76       | 0.7  | 50       |
+----------+---------+------+----------+----------+------+----------+
| Total    | 413.5   | 0.6  | 266      | 402      | 0.6  | 250      |
+----------+---------+------+----------+----------+------+----------+
| Total    |         |      |          |          |      |          |
| corn     |         |      |          |          |      |          |
+----------+---------+------+----------+----------+------+----------+
| White    | 2,025   | 3.3  | 6,743    | 1,280    | 3.0  | 3,900    |
+----------+---------+------+----------+----------+------+----------+
| Yellow   | 1,198.5 | 4.1  | 4,973    | 670      | 3.9  | 2,600    |
+----------+---------+------+----------+----------+------+----------+
| TOTAL    | 3,223.5 | 3.6  | 11,716   | 1,950    | 3.3  | 6,500    |
+----------+---------+------+----------+----------+------+----------+

**Consumption**

We include silo deliveries for March and April in our delivery figure
as, depending on the season, the new crop becomes available from March
each year. We would normally expect to receive only a few thousand tons
in January and February.

Commercial deliveries up to the end of December 2005 are shown in the
following table:

  ----------------- ----------------- ----------------- -----------------
  Deliveries '000   White corn        Yellow corn       Total corn
  MT                                                    

  March 2005        18                53                71

  April             37                104               141

  May -- Nov.       5,998             3,832             9,830

  TOTAL             6,050             3,990             10,040

  Crop estimate     6,540             4,910             11,450

  Farm retentions   490               920               1,410
  ----------------- ----------------- ----------------- -----------------

The fact is that there is still more than 1.4 million tons of the
revised 2004 crop unaccounted for. We can consider this as farm
retentions although it is much higher than the usual 450,000 tons
(100,000 tons white and 350,000 tons yellow) retained on farms. It can
be assumed that a big portion of the additional farm retentions is being
stored for later sale. If half of the retentions reach the market later
this year it could amount to about 250,000 tons of white and 450,000
tons of yellow corn.

A commercial PS&D based only on deliveries from March to December 2005
can be supplied to highlight the current situation.

+-------------------+----------------+----------------+----------------+
| # FAS 2004        | # MY           | #              | '000 MT        |
|                   | May05/April 06 | Commercial S&D |                |
+-------------------+----------------+----------------+----------------+
| '000 Metric tons  | White          | Yellow         | Total          |
+-------------------+----------------+----------------+----------------+
| B/Stocks, May 1,  | 2345           | 590            | 2935           |
| 05                |                |                |                |
+-------------------+----------------+----------------+----------------+
| Revised           | 6540           | 4910           | 11450          |
| Production        |                |                |                |
+-------------------+----------------+----------------+----------------+
| Deliveries, March | 6050           | 3990           | 10040          |
| --Dec             |                |                |                |
+-------------------+----------------+----------------+----------------+
| Farm retentions   | 490            | 920            | 1410           |
+-------------------+----------------+----------------+----------------+
| Imports           | 0              | 270            | 270            |
+-------------------+----------------+----------------+----------------+
| Total supply      | 8395           | 4850           | 13245          |
+-------------------+----------------+----------------+----------------+
| Expected exports  | 1650           | 350            | 2000           |
+-------------------+----------------+----------------+----------------+
| Expected          | 4675           | 3570           | 8245           |
| consumption       |                |                |                |
+-------------------+----------------+----------------+----------------+
| Ending stocks     | 2070           | 930            | 3000           |
| forecast\*        |                |                |                |
+-------------------+----------------+----------------+----------------+

\* Plus the additional stock available on farms, which could amount to
700,000 tons, 250,000 tons of white and 450,000 tons of yellow as shown
above.

The analysis above includes imports, which resumed in January 2006 with
59,000 tons of yellow corn from Argentina. Further imports are foreseen
before the end of the current season, as about 270,000 tons can be
imported at a TRQ rebate of duty. Importers are also looking at the
Biotech certificate requirements for white corn.

The smaller 2004 crop and the cutback in the 2005 crop will tighten up
the supply situation and increase the demand for imports. With a
commercial carry over of about 3 million tons at the end of April 2006
and a delivery forecast of about 5.8 million tons from the 2005 crop,
total supply may reach 8.8 million tons compared to domestic demand of
8.2 million tons, a surplus of 600,000 tons. South Africa traditionally
supplies its Customs Union members with about 450,000 tons annually
cutting the surplus to 150,000 tons. Minimum carry over stocks amount to
about 700,000 tons creating the shortfall. We can give a 2006/07 PS&D
forecast to illustrate the point.

  ----------------- ----------------- ----------------- -----------------
  FAS 2005 forecast MY May 06/April   Commercial S&D    '000 MT
                    07                                  

  1,000 MT          White corn        Yellow corn       Total corn

  B/Stocks          2070              930               3000

  Crop forecast     3700              2550              6250

  Farm retentions   100               350               450

  Expected          3600              2200              5800
  Deliveries                                            

  Imports           0                 600               600

  Supply            5670              3730              9400

  Exports\*         400               50                450

  Consumption       4700              3550              8250

  E/Stock           570               130               700
  ----------------- ----------------- ----------------- -----------------

> \*Exports to Customs Union members Botswana, Lesotho, Namibia and
> Swaziland only.

This analysis does not take other regional demand, (Zimbabwe, Zambia,
Malawi and Mozambique) into account. These countries can, however,
source imports from other origins but the situation is aggravated by
their demand for firstly white corn, and in the case of Zimbabwe and
Zambia, non-Biotech corn. This will put further pressure on South
African white corn supplies. Some yellow corn may also be used in lieu
of white corn for human consumption. The stocks from the 2004 crop,
presumably still being held on farms, may also come in the picture
cutting the deficit.

## 

## 

## 

## **Trade**

In the meantime exports continue unabated with about 84,000 tons
exported in the first three weeks of January. Zimbabwe continues to be
the main market taking 61% of white corn exports through January 20.
Zimbabwe pronounced its intention to import 1.2 million tons this season
and is averaging more than 85,000 tons per month. Both Malawi and Zambia
must pick up their rate of imports substantially over the next few
months to avert famine. Current high price levels and clogged supply
lines are slowing down the process. Zambia, like Zimbabwe, requires GMO
free corn. The high prices also killed off the possibility of major
overseas sales as well as dampening the World Food Program's demand for
South African corn.

+-----------+----------+----------+----------+----------+-----------+
| EXPORTS   | 12/      | 01/07-   | 01/      |          | 20        |
|           | 31-01/06 |          | 14-01/20 |          | 05/04/30- |
| White     |          | 01/13    |          |          |           |
| corn      |          |          |          |          | 2         |
|           |          |          |          |          | 006/01/20 |
+-----------+----------+----------+----------+----------+-----------+
| Angola    |          |          |          |          | 12785     |
+-----------+----------+----------+----------+----------+-----------+
| Benin     |          |          |          |          | 2278      |
+-----------+----------+----------+----------+----------+-----------+
| Botswana  | 2689     | 4178     | 4793     |          | 131638    |
+-----------+----------+----------+----------+----------+-----------+
| Cameroon  |          |          |          |          | 1774      |
+-----------+----------+----------+----------+----------+-----------+
| Ghana     |          |          |          |          | 7638      |
+-----------+----------+----------+----------+----------+-----------+
| Kenya     |          |          |          |          | 33614     |
+-----------+----------+----------+----------+----------+-----------+
| Lesotho   | 275      | 431      | 1376     |          | 51164     |
+-----------+----------+----------+----------+----------+-----------+
| M         |          |          |          |          | 387       |
| adagascar |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Malawi    | 569      | 1653     | 1884     |          | 40995     |
+-----------+----------+----------+----------+----------+-----------+
| Mali      |          |          |          |          | 2258      |
+-----------+----------+----------+----------+----------+-----------+
| M         | 1686     | 3612     | 418      |          | 85655     |
| ozambique |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Namibia   | 3156     | 1792     | 2967     |          | 25234     |
+-----------+----------+----------+----------+----------+-----------+
| Sudan     |          |          |          |          | 28272     |
+-----------+----------+----------+----------+----------+-----------+
| Swaziland | 1038     | 565      | 508      |          | 17544     |
+-----------+----------+----------+----------+----------+-----------+
| Tanzania  |          |          |          |          | 10000     |
+-----------+----------+----------+----------+----------+-----------+
| Zambia    | 3352     | 7147     | 5748     |          | 36776     |
+-----------+----------+----------+----------+----------+-----------+
| Zimbabwe  | 6817     | 8159     | 12033    |          | 754756    |
+-----------+----------+----------+----------+----------+-----------+
|           |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Total     | 19582    | 27537    | 29727    |          | 1 242 768 |
+-----------+----------+----------+----------+----------+-----------+
| EXPORTS   |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Yellow    |          |          |          |          |           |
| corn      |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Angola    |          |          |          |          | 204       |
+-----------+----------+----------+----------+----------+-----------+
| Botswana  | 513      | 740      | 956      |          | 14505     |
+-----------+----------+----------+----------+----------+-----------+
| Indonesia |          |          |          |          | 49500     |
+-----------+----------+----------+----------+----------+-----------+
| Iran      |          |          |          |          | 93284     |
+-----------+----------+----------+----------+----------+-----------+
| Japan     |          |          |          |          | 113098    |
+-----------+----------+----------+----------+----------+-----------+
| Lesotho   |          | 10       |          |          | 1647      |
+-----------+----------+----------+----------+----------+-----------+
| M         | 53       | 104      | 218      |          | 5992      |
| ozambique |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Namibia   | 377      | 368      | 321      |          | 13357     |
+-----------+----------+----------+----------+----------+-----------+
| Swaziland | 296      | 1046     | 925      |          | 22159     |
+-----------+----------+----------+----------+----------+-----------+
| Zambia    |          |          | 189      |          | 189       |
+-----------+----------+----------+----------+----------+-----------+
| Zimbabwe  | 245      | 328      | 117      |          | 2043      |
+-----------+----------+----------+----------+----------+-----------+
|           |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Total     | 1484     | 2596     | 2726     |          | 315 978   |
+-----------+----------+----------+----------+----------+-----------+
|           |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Export    | 21066    | 30133    | 32453    |          | 1 558 746 |
| total     |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
|           |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| IMPORTS   |          |          |          |          |           |
| Yellow    |          |          |          |          |           |
| corn      |          |          |          |          |           |
+-----------+----------+----------+----------+----------+-----------+
| Argentina | 12218    | 27577    | 18923    |          | 58 718    |
+-----------+----------+----------+----------+----------+-----------+

Imports also appeared in January for the first time this season. In the
first three weeks 59,000 tons were imported and it is possible that the
Tariff Rate Quota of about 269,000 tons will be reached before the end
of April. The problem will be to satisfy the demand for white corn
complying with South Africa's GMO requirements, which are not freely
available in the world market. Apparently some supplies from Mexico are
on its way but is more likely destined for neighboring states.

#### **Prices**

The main reason for the production cutback this year was the low SAFEX
prices after harvest in 2005. In June both white and yellow corn prices
for August, October and December were well below \$100/ton, or R600/ton
at the current exchange rate. This was due to the usual post harvest
price slump and the commercial crop estimate of 12 million tons at that
stage implying a big surplus. As the official crop estimate is mainly
based on farmer's returns the Crop Estimates Committee cannot be blamed,
especially as the market also seemed to support the estimate. Deliveries
to the silos, however, disappointed while farmers increased farm
retentions due to the low prices. Farmers claimed that the \$100/ton was
below their cost of production and decided to cut back the area planted
in 2005. Grain SA was actually advising farmers not to plant at all.
Basically international corn prices vary about 10% to either side of
\$100/ton. SAFEX is a much more volatile market with the March 06 white
corn price nearly doubling from June to December 2005 and the yellow
corn price increasing by 50%.

The following table shows current SAFEX futures prices.

+-----------+-------------+-------------+-------------+-------------+
| Rand/MT   | US\$/MT     |             |             |             |
+-----------+-------------+-------------+-------------+-------------+
| White     | December 05 | #           | August 05   | October 05  |
| corn      |             | ## March 06 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 06/27/05  | R634=\$94.5 | R670=\$99.9 | R574=\$85.5 | R593=\$88.4 |
+-----------+-------------+-------------+-------------+-------------+
| 07/27/05  | R           | R           | R           | R           |
|           | 671=\$100.9 | 709=\$106.6 | 619=\$122.6 | 632=\$107.8 |
+-----------+-------------+-------------+-------------+-------------+
| 08/31/05  | R           | R           | ##          | R           |
|           | 735=\$114.0 | 766=\$118.8 | #### May 06 | 695=\$107.8 |
+-----------+-------------+-------------+-------------+-------------+
| 09/30/05  | R           | R           | R           | R           |
|           | 847=\$133.4 | 868=\$136.7 | 867=\$136.5 | 823=\$129.6 |
+-----------+-------------+-------------+-------------+-------------+
| 11/03/05  | R           | R           | R           | ## July 06  |
|           | 834=\$125.4 | 851=\$128.0 | 856=\$128.7 |             |
+-----------+-------------+-------------+-------------+-------------+
| 11/30/05  | R           | R           | R           | R           |
|           | 959=\$147.5 | 978=\$150.5 | 975=\$150.0 | 980=\$150.8 |
+-----------+-------------+-------------+-------------+-------------+
| 12/27/05  | September   | R1          | R1          | R1          |
|           | 06          | 227=\$193.2 | 204=\$189.6 | 195=\$188.2 |
+-----------+-------------+-------------+-------------+-------------+
| 01/26/06  | R1          | R1          | R1          | R1          |
|           | 110=\$185.0 | 076=\$179.3 | 075=\$179.2 | 091=\$181.8 |
+-----------+-------------+-------------+-------------+-------------+
|           |             |             |             |             |
+-----------+-------------+-------------+-------------+-------------+
| Yellow    | December 05 | #           | August 05   | October 05  |
| corn      |             | ## March 06 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 06/27/05  | R669=\$99.7 | R           | R607=\$90.5 | R629=\$93.7 |
|           |             | 705=\$105.1 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 07/27/05  | R           | R           | R625=\$94.0 | R635=&95.5  |
|           | 667=\$100.3 | 697=\$104.8 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 08/31/05  | R           | R           | ##          | R645=\$100  |
|           | 683=\$105.9 | 708=\$109.8 | #### May 06 |             |
+-----------+-------------+-------------+-------------+-------------+
| 09/30/05  | R           | R           | R           | R           |
|           | 772=\$121.6 | 780=\$122.8 | 786=\$123.8 | 755=\$118.9 |
+-----------+-------------+-------------+-------------+-------------+
| 11/03/05  | R           | R           | R           | ## July 06  |
|           | 777=\$116.8 | 789=\$118.6 | 801=\$120.9 |             |
+-----------+-------------+-------------+-------------+-------------+
| 11/30/05  | R           | R           | R           | R           |
|           | 797=\$122.6 | 804=\$123.7 | 837=\$128.8 | 814=\$125.2 |
+-----------+-------------+-------------+-------------+-------------+
| 12/27/05  | September   | R           | R1          | R1          |
|           | 06          | 995=\$156.7 | 005=\$158.3 | 005=\$158.3 |
+-----------+-------------+-------------+-------------+-------------+
| 01/26/06  | R           | R           | R           | R           |
|           | 975=\$162.5 | 970=\$161.7 | 964=\$160.7 | 960=\$160.0 |
+-----------+-------------+-------------+-------------+-------------+
|           |             |             |             |             |
+-----------+-------------+-------------+-------------+-------------+
| Wheat     | December 05 | #           | August 05   | October 05  |
|           |             | ## March 06 |             |             |
+-----------+-------------+-------------+-------------+-------------+
| 06/27/05  | R1          | R1          | R1          | R1          |
|           | 481=\$220.7 | 521=\$226.7 | 603=\$238.9 | 580=\$235.5 |
+-----------+-------------+-------------+-------------+-------------+
| 07/27/05  | R1          | R1          | R1          | R1          |
|           | 475=\$221.8 | 520=\$228.6 | 537=\$231.1 | 542=\$231.9 |
+-----------+-------------+-------------+-------------+-------------+
| 08/31/05  | R1          | R1          | ##          | R1          |
|           | 379=\$213.8 | 429=\$221.6 | #### May 06 | 490=\$231.0 |
+-----------+-------------+-------------+-------------+-------------+
| 09/30/05  | R1          | R1          | R1          | R1          |
|           | 421=\$223.8 | 460=\$229.9 | 473=\$232.0 | 440=\$226.8 |
+-----------+-------------+-------------+-------------+-------------+
| 11/03/05  | R1          | R1          | R1          | ## July 06  |
|           | 463=\$220.0 | 484=\$223.2 | 520=\$228.6 |             |
+-----------+-------------+-------------+-------------+-------------+
| 11/30/05  | R1          | R1          | R1          | ## R1       |
|           | 369=\$210.6 | 401=\$215.5 | 421=\$218.6 | 432=\$220.3 |
+-----------+-------------+-------------+-------------+-------------+
| 12/27/05  | September   | R1          | R1          | ## R1       |
|           | 06          | 450=\$228.3 | 464=\$230.6 | 470=\$231.5 |
+-----------+-------------+-------------+-------------+-------------+
| 01/26/06  | R1          | R1          | R1380=\$230 | ## R1       |
|           | 430=\$238.3 | 360=\$226.7 |             | 409=\$234.8 |
+-----------+-------------+-------------+-------------+-------------+

#### **WHEAT**

  ------------------- --------- --------- --------- ---------- --------- ----------
  PSD Table                                                              

  Country             South                                              
                      Africa                                             

  Commodity           Wheat                                              

  1000 HA             2003      Revised   2004      Estimate   2005      Forecast

  1000 MT             USDA      Post      USDA      Post       USDA      Post
                      \[Old\]   \[New\]   \[Old\]   \[New\]    \[Old\]   \[New\]

  Market Year Begin             10/2003             10/2004              10/2005

  Area Harvested      748       748       830       830        800       801

  Beginning Stocks    898       897       598       614        560       585

  Production          1540      1540      1680      1680       1800      1840

  TOTAL Mkt. Yr.      1278      1278      1396      1395       1300      1200
  Imports                                                                

  Jul-Jun Imports     911       837       1407      1350       1300      850

  Jul-Jun Import U.S. 475       414       270       265        0         250

  TOTAL SUPPLY        3716      3715      3674      3689       3660      3625

  TOTAL Mkt. Yr.      379       380       324       326        350       325
  Exports                                                                

  Jul-Jun Exports     356       320       338       350        350       325

  Feed Dom.           10        32        10        23         10        25
  Consumption                                                            

  TOTAL Dom.          2739      2721      2790      2778       2750      2805
  Consumption                                                            

  Ending Stocks       598       614       560       585        560       495

  TOTAL DISTRIBUTION  3716      3715      3674      3689       3660      3625
  ------------------- --------- --------- --------- ---------- --------- ----------

###### Production

The sixth official estimate of the 2005 wheat crop is 1.84 million tons,
2% larger than the fifth estimate mainly due to good rains in the Free
State. The expected yield is 2.3 MT/ha. The production estimate for the
Western Cape is 645,000 tons at 2.15 MT/ha. and the Free State 551,000
MT at 1.45 MT/ha. The total area planted is unchanged at 800,500 ha.

Commercial human consumption increased by 3.1% from 2.652 million tons
in MY2003/04 to 2.734 million tons in MY 2004/05. Imports increased from
1.278 million tons in 2003/04 to 1.394 million tons in 2004/05 and are
expected to reach 1.2 million tons in 2005/06.

Imports during the 2005/06 season continue unabated, from October 1 to
January 20, 343,165 tons were imported. The following table contains the
details.

  ----------------- ----------------- ----------------- -----------------
  From              For Africa        For RSA           Total

  USA               19,674            77,127            96,801

  Australia                           58,579            58,579

  Argentina         7,862             41,612            49,474

  Germany           31,164            72,316            103,480

  Ukraine                             34,831            34,831

  Total             58,700            284,464           343,165
  ----------------- ----------------- ----------------- -----------------

Exports, 2006:

  -------------- -------------- -------------- -------------- -------------------
  MT             12/21-01/06    01/07-01/13    01/14-01/20    10/01/05-01/20/06

  Botswana                                                    18,910

  From Germany   2759           1511                          

  RSA            1318           1242           1395           

  Lesotho                                                     26,629

  From Germany   1786           179                           

  RSA            440                           440            

  Namibia                                                     3,859

  From USA                      908                           

  RSA                                          1188           

  Swaziland                                                   11,103

  From Canada    220                                          

  Zambia                                                      

  From Argentin                 232            350            7,431

  From USA                                     648            

                                                              

  Total          6523           3164           4929           67,932
  -------------- -------------- -------------- -------------- -------------------