White maize reaches a record high as stocks shrink

White-maize futures traded in South Africa, which is set to run short of supplies this year, reached the highest price since trading started almost 18 years ago.

White maize for delivery in March climbed as high as R3 155 a metric tonne on the South African Futures Exchange in Johannesburg before closing little changed at R3 120 rand a tonne.

The day’s high was the highest price for a most-active contract since trading began in August 1996.

Yellow maize for delivery in July declined 0.8% to R2 270 rand a tonne.

National stockpiles of the grain fell 25% by December 31 from a year earlier, the Pretoria-based South African Grain Information Service said January 24.

Inventories slid to 1.84-million tonnes for white maize and dropped to 1.33-million tonnes for the yellow variety. "The available stock is very tight," Andrew Fletcher, an independent trader in Kroonstad in the Free State province, said by phone. "It is a concern."

The country has about 3.1-million tonnes of stockpiled maize remaining until April, when the harvest begins, according to Grain SA, which represents commercial farmers. Monthly demand comes to about 900 000 tonnes, indicating a shortfall of about 500 000 tonnes by April.

South Africa is the continent’s largest producer of maize. Meal made from the white variety is used for a staple food known locally as pap and yellow maize is mostly fed to animals.

Wheat for delivery in March declined 0.4% to R3 820 a tonne. Soybeans for delivery in May fell 1.1% to R5 880 rand a tonne. – Bloomberg

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