August 30, 2007

South Africa corn futures lower following share drop in CBOT

South African white corn futures tumbled Wednesday (August 29) in line with an overnight drop in Chicago, with some traders ignoring Tuesday's nearly as-expected crop production forecast.

December white corn, the most active, ended 43 rand lower at 1,865 rand a tonne and September fell 39 rand to 1,811 rand.

"The market was under pressure from weaker price in America and slight cut in corn production forecast," a Johannesburg-based trader said.

He said the market was split between those that expected the committee to significantly cut its production forecast and those that expected it to leave it unchanged.

After the market closed on Tuesday, the committee reported it has lowered its corn production forecast for the current season by just 2,000 tonnes to 6.902 million tonnes.

An I-Net Bridge poll had predicted that the committee would leave the crop forecast unchanged at 6.904 million tonnes.

"Some guys actually expected the committee to cut the crop to around 6.7 million tonnes," the trader said.

Dow Jones Newswires reported that Chicago Board of Trade corn futures settled lower Tuesday, undermined by long liquidation as market longs trimmed their positions. September corn settled 8 1/2 cents lower to US$3.27 1/4 per bushel, December fell 8 1/4 cents to US$3.45 and March declined 7 3/4 cents to US$3.61 1/2.

Shortly after the local grain market closed the rand was bid at 7.24 per dollar, from 7.24 on Tuesday.