July 19, 2007

 

South Africa's corn futures higher on crop concerns

 

 

South African white corn futures advanced Wednesday, buoyed by signs that corn production would be lower than expected. Modest gains on the Chicago Board of Trade's electronic trading session provided additional support.

People are starting to believe that South Africa would not reach the 7 million tonnes production forecast, a Johannesburg-based trader said.

 

December white corn, the most active, added 22 rand to 1,762 rand per tonne (US$254.63)  and September rallied 32 rand to 1,720 rand (US$248.57).

 

The trader said that market was likely to continue its upward trend Thursday as the latest harvest figures showed slower corn deliveries to the silos.

 

Just after the market closed, the South African Grain Information Service's weekly harvest report showed that corn delivered fell by 81,000 tonnes to 274,00 tonnes compared with deliveries the week before.

 

Last week's deliveries brought total corn harvested since May to 4.2 million tonnes, about 2.8 million tonnes away from the projected total production.

 

"We should be seeing much faster deliveries by now as July is the key harvest month. (The Crop Estimates Committee) would have to cut its forecast at its next meeting," the trader said.

 

The committee meets Wednesday next week to release the sixth summer production forecast. It would also release the winter preliminary area planted on the same date.

 

Meanwhile, South Africa's corn yields for the 2007/08 season fell by 82,000 tonnes last week to 274,000 tonnes compared with yields the week before, the South African Grain Information Service said Wednesday in its weekly report.

 

Shortly before the local grain market closed the rand was bid 6.96 per dollar, from 6.93 on Tuesday.

 

On the CBOT electronic trading platform, September corn was trading 2 cents higher at US$324 4/8 and December gained by the same margin to US$338 6/8.