October 10, 2007

 

South Africa corn futures rebound on bargain hunting

 

 

South African corn futures bounced back Tuesday (Oct 9, 2007) in a surprise move as traders chased after bargains following recent sharp losses.

 

Investors might have pushed too much on the downside and that has invited new buyers into the market, one trader said.

 

He said the market remained fundamentally bearish due to rains and lack of fresh inputs in the US and that today's session was more of "a technical bounce in a bear market".

 

December white corn, the most active contract, gained 35 rand to 1,792 rand a tonne, and March corn added 38 rand to 1,818 rand per tonne.

 

Shortly before the local grain market closed, the rand was bid at 6.87 rand to the dollar from an overnight close of 6.88.

 

Grain South Africa, which represents the bulk of local grain farmers, Tuesday said it would not advise members to plant corn in the coming season despite good early rains.

 

Grain SA's comments come amid talk in the market that recent downpours would force farmers to redraw planting plans.

 

Among other grains on the South African Futures Exchange, wheat fell by the extended daily limit, following in the footsteps of international prices.

 

"The yield loss threat is still there but the market might have been overbought," another trader said.

 

The benchmark December wheat fell 65 rand, the extended allowable daily trading limit, to 2,961 rand a tonne and March wheat fell by the same margin to 3,010 rand.

 

Wheat prices broke records on the upside in the past few weeks on fears of shrinking global wheat inventories owing to either excessively dry or wet conditions in Australia, Argentina and the EU.