August 24, 2012

South Africa's 2012 corn output forecast steady at 11 million tonnes

Largely steady from 11 million tonnes in their previous forecast, South Africa's 2012 corn yield forecast by traders is seen at 10.919 million tonnes.

The government's Crop Estimates Committee's (CEC) last month cut its forecast to 10.836 million tonnes saying deliveries to silos point to a smaller crop. But traders said the government slightly under-estimated the crop as the pace of deliveries was promising.

"If you look at deliveries that have been coming in, it has been more than the market expected," a trader said.

South African Grain Information Services data showed this week that since the beginning of the 2012 marketing season in May, farmers had delivered a total of 9.586 million tonnes of corn to the silos.

The forecasts of the eight trading houses ranged between 10.8 million tonnes and 11.1 million tonnes. The CEC is due to release its seventh production forecast of this season's summer crops output at 1330 GMT on Tuesday (Aug 21).

The market was also watching events in the US, where the worst drought in half a century is weighing on corn. The local markets largely take cues from the Chicago Board of Trade (CBOT) as South Africa competes with the US for export markets.

Domestic corn futures are slightly off their recent record highs, with the most active December white corn contract trading 1.70% lower at ZAR2,777 (US$334) a tonne as of 0820 GMT. The contract's record high is ZAR2,879 (US$346) a tonne.