March 18, 2008

Wheat closes at record high in South Africa

South African wheat prices rose by the daily limit Monday, making it the fourth straight day of record closing highs on the back of a weaker rand amid global supply worries.

The most active wheat for May delivery ended 65 rand higher at a record ZAR4,245 a tonne and March wheat, which trades without limits because it is in delivery, rallied ZAR102 to ZAR4,250/tonne.

"We locked limit up from the opening few minutes on the weaker rand. Nothing else really," one trader said.

Just before the market close, the rand which when weak boosts export competitiveness - remained sharply weaker as economic woes continued to weigh on global markets, sparking a rise in risk aversion.

Shortly before the local market closed, the rand was bid at 8.12 to the dollar from 7.91 on Friday.

Wheat prices have rallied more than ZAR200 in the past four days on a combination of shrinking US inventories, global production failing to keep up with demand and the weaker rand, traders said.

(US$1=ZAR 8.12)