Morning Grain Report : South Africa
Vinci Trading
17 February 2015
White and yellow corn in South Africa, the continent’s biggest producer of the grains, climbed as traders said drought in key producing areas will lead to a shortage. White corn for delivery in July rose for a fifth consecutive day, advancing 4.3 percent to 2,890 rand ($248) a metric ton, the highest for a most-active contract since March 12, by the midday close in Johannesburg.
The South African Futures Exchange authorized a higher-than-usual price-increase limit for a third straight session, allowing prices to climb by as much as 120 rand a ton. Yellow corn for delivery in the same month added 3.3 percent to 2,484 rand a ton, the highest since Jan. 21, 2014.
“Damage to the crop is getting more and more severe and the prospects for this week are not looking good,” Andrew Fletcher, an independent trader in Kroonstad in the Free State province, said by phone. “This is the point when the crop is producing kernel. It’s a critical time.”
Dry, hot weather in the Free State and North West provinces has caused “irreversible” damage to
crops in some areas, Jannie de Villiers, chief executive officer of Grain SA, said Feb. 12.
White corn, called maize locally, is used to make a staple food known as pap while the yellow type is mainly fed to animals.
The country’s 2014 harvest was its biggest since 1981 after yields rose to the highest on record, the Crop Estimates Liaison Committee said last week. Local corn prices will probably continue to rise until they reach the same as the cost of imports, Fletcher said.
Shipments from the U.S. and Argentina are currently about 2,900 rand a ton, according to South African Grain Information Service’s website.
http://www.vinci.co.za/17-february-2015-morning-grain-report/