South African maize futures ticked up further on Tuesday in line with Chicago and had scope for more gains given lingering concerns about this year’s harvest, traders said.
The benchmark December white maize contract climbed R15 to R1 454 a tonne, bringing its gains so far this year to roughly 26%. The rise put it in sight of a 29-month high of R1 486 touched last week.
”Obviously Chicago was up overnight, which was the main driving force. It probably wasn’t up as much as the market expected today,” said one dealer.
”I think the market still has some way to go,” he said, predicting at least another R10 jump in the short term although profit-taking might cut into gains occasionally.
Export data released after the market closed showed South Africa was still finding buyers despite high prices.
White maize exports rose slightly to 9 204 tonnes in the week to July 7 from 7 726 the previous week, the South African Grain Information Service (Sagis) said.
Yellow maize exports were 1 507 tonnnes versus 1 453 previously. South Africa imported 19 887 tonnes of yellow maize from Argentina, Sagis added.
Maize prices have rallied since late last year on news that farmers planned a substantially smaller crop this season.
The advance has been further fuelled by fears that late plantings and excessive rains might have reduced the most desired grade one grains.
The South African Futures Exchange (Safex) said on Tuesday it would reintroduce the grade two white maize contract from Wednesday for the first time since 2003, confirming worries about the quality of the harvest.
The Chamber of Milling said last month that heavy rains might have damaged crops but that losses could not yet be quantified.
The most recent estimates predict a crop of around six-million tonnes this season compared with 11,45-million last year. – Reuters