White maize falls to 2 1/2-year low

File image: Reuters

File image: Reuters

Published May 16, 2014

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Johannesburg - South African white corn dropped to the lowest level in more than 2 1/2 years, following a decline in global prices as world reserves of the grain climb.

White corn for delivery in July fell 0.9 percent to 1,900.20 rand a metric ton by the close on the South African Futures Exchange in Johannesburg.

This is the lowest for a most-active contract since August 2, 2011.

The contract’s relative strength index is 21.59.

Readings lower than 30 indicate a potential impending increase to some analysts who study technical charts.

Corn fell for a third day in Chicago.

Global reserves of the grain will climb 7.9 percent to 181.73 million tons and the highest since 2000, the US Department of Agriculture said on May 9.

Warmer weather across the Great Plains and Midwest will speed up planting progress, A/C Trading Co. said.

South Africa’s harvest of both white and yellow corn may be the biggest in 33 years, the Crop Estimates Committee said.

International corn prices have been “under pressure based on good planting progress in the US,” Andrew Fletcher, an independent analyst in Kroonstad, South Africa, said by phone.

“With peak harvest time imminent, the price may stay at these levels,” he said, referring to the local crop.

“There is a surplus at the moment, and if we are able to export these surplus harvests, prices will stay at these levels,” he said.

The nation is Africa’s biggest producer of corn, and meal made from the white type is used as a staple food called pap, while the yellow grain is used as animal feed.

Yellow corn declined 1 percent to 2,022.20 rand a ton, while wheat for July delivery fell 0.2 percent to 3,950 rand a ton in Johannesburg. - Bloomberg News

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