English duo Andy Sullivan and Matt Wallace carded three-under 69s to move to five under for the championship while former Ryder Cup victor Jamie Donaldson, who carded the first ace of 2018, is a further two shots back after a one-under 71 which saw the Welshman mix five birdies with four bogeys.
Grace, a South African, had a haywire front nine that included two eagles, two birdies and two bogeys.
Austin Connelly made the cut at the BMW SA Open golf championship in Edenvale, South Africa.
I made eagle on the second hole and kind of kept it going from there."Tournament host Ernie Els carded an opening 71, while Retief Goosen was on three-under 69, together with Charl Schwartzel who had a frustrating day with three bogeys in his round.Grace was installed as the bookmakers' favourite ahead of the tournament, and if he plays like this when he's rusty, he's going to be hard to catch".
Defending champion Graeme Storm of England, who pipped golf superstar Rory McIlroy of Northern Ireland in a play-off previous year to win the second oldest national championship after the British Open, carded a 75. It is a great start to the year.
"On all the par-fives, I pretty much hit great tee-shots and really gave myself some chances".
The American eagled the second, then birdied three of four holes from the fifth and four of five from the 12th.
Donaldson's ace and Southgate's incredible wedge shot from South African Open, as Grace makes three eagles in the first round.
"I am excited for the weekend but there is still 36 holes to play and I must try to stay focused during the last two rounds".
Four consecutive birdies from the 10th lifted Schwartzel's round, while the card of four-time Major victor Els was stained by successive bogeys at par fours. It could have been even better if not for a bogey on No. 13 and a double bogey on the last.