Forecast for South Africa's corn production takes an upturn

South Africa raised its forecast for the size of the nation's corn crop this season by 1.6% to 13.32 million tonnes, according to the Crop Estimates Committee.

The committee increased its estimate for yellow corn by 1.4% to 5.32 million tonnes and for white corn production by 1.8% to eight million tonnes, said Marda Scheepers, a spokeswoman for the agency.

The forecast is bad for prices in the longer term, said Rowan Erasmus, a commodity trader at Free State Cooperative in Bothaville, South Africa. "We're sitting with lots of inventories and we don't have enough infrastructure to export enough."

With an ageing rail system that prioritises moving higher value coal and iron ore to ports, South Africa's corn farmers rely mostly on demand from their home market and neighbouring countries, where grain can be delivered by truck.

A 14-fold increase in the use of genetically modified seed in the past decade to more than 70% of the land under corn has boosted yields, cementing South Africa's position as the continent's biggest producer of the grain.

Over-planting, after the national meteorological agency warned of a drought that never materialised, also contributed to this year's bumper harvest, which will mostly be reaped by August. The harvest may be the biggest since the 14.4 million tonnes reaped in 1982 and 8.7% higher than last year.