January 4, 2012
Exports, Argentina's drought push up South African corn prices
Concern over local stocks being depleted by exports and global supplies possibly curbed by a drought in South America bring about the highest increment of South African corn prices since October.
Since the May 1 start of the marketing season South Africa has exported 1.96 million tonnes of corn, according to the South African Grain Information Service, an industry body. In the whole of the preceding market year South Africa shipped 2.07 million tonnes.
"About 200,000 tonnes are still expected to be exported between January and March and this will take away the extra stock," Brink van Wyk, a trader at Bosveld Graan (Pty) Ltd, said in an interview from Pretoria today. "This automatically means higher prices."
White corn for March delivery rose 3.1% to 2,644 rand (US$328) per tonne on the South African Futures Exchange in Johannesburg, its biggest jump since October 21. Yellow corn for July delivery advanced 3.7% to 2,035 rand a tonne, its largest gain since October 12.
South African corn stocks plunged 40% to 4.18 million tonnes as of the end of November from a year earlier, South African Grain said on December 22.
In South Africa white corn is used to make corn meal, a staple food, while yellow corn is mainly fed to animals.
Most corn-growing areas in Argentina, southern Brazil and Paraguay have received less than half of their average rainfall since December 1, according to T-Storm Weather LLC, a Chicago-based weather forecaster. Argentina is the world's second-biggest corn exporter after the US and normally starts reaping its crop in March.
"More and more people are buying corn because they are concerned about the shortages in supply due to the drought," Benjamin Swanepoel, a trader at Trademar Futures, said in an interview from Johannesburg.