South African maize and wheat futures ended firmer for the fourth straight session on Friday on the back of a weaker rand.
Dry weather expectations in the US drove prices higher earlier in the week‚ but these could well moderate into next week.
“The across the board options close-out in Chicago tonight and the close-out on our markets on Monday will determine prices going forward‚” said Johan van Rensburg‚ commodity trader at Mooirivier Grain in Potchefstroom.
The near-dated July white maize contract was up R23.00 at R2‚093 a ton‚ September white maize gained R24.00 to R2‚138 a ton and December white maize rose R21.00 to R2‚190.00 a ton‚ according to preliminary I-Net Bridge data.
The near-dated July yellow maize contract gained R34.60 to R2‚054.60 a ton‚ the September yellow maize contract edged up R29.60 to R2‚087.60 a ton and the December yellow maize contract added R25.00 to R2‚130 a ton.
The July wheat contract added R43 to R2‚998 a ton‚ September wheat jumped R36 to R3‚052 a ton and the December wheat contract gained R23 to R3‚006 a ton.
Dow Jones Newswires reported that US spot maize futures plunged more than 4% on Thursday‚ fuelled by a plethora of negative influences‚ ranging from Midwest rain‚ a gloomy world economy and slumping demand.
Investors cashing in prior gains were featured with traders viewing the nearly 6% rally in prices for the week as larger than needed amid declining demand.
“With demand not as stout as people had thought‚ investors began to pull the plug on some bullish bets in the market‚” said John Kleist‚ analyst with ebottrading.com.
What demand the market had was from the domestic side‚ and once that began to dry up‚ bullish traders had little to hang their hats on‚ with poor weekly export sales a reflection of slower demand‚ Kleist said.
Ethanol processors and livestock feeder’s margins were bleeding red from high maize prices‚ and they were perfectly content to scale back operations until cheaper supplies were available from the fall harvest‚ said Mike Zuzolo‚ president of Global Commodity Analytics and Consulting.
Meanwhile‚ worries about a global slowdown added broader-based weakness. “Risk-off trade in the outside markets‚ and fears of deflation thanks to the Chinese potentially experiencing a hard-landing of their economy‚ have once again gripped the overall investor sentiment‚” Zuzolo said. “Look at the gold‚ silver‚ and crude oil markets‚ very big losers with the crude especially having lost over 8% in the past 4 trading days.”
CBOT July maize dropped 25 1/4 cents or 4.1% to US$5.86 1/2 a bushel‚ and December maize was down 16 1/2 cents or 2.9% to $5.50.
Separately‚ soyabeans and wheat also fell‚ as broader based weakness across some asset classes overshadowed supportive demand.
CBOT July soyabeans fell 8 cents or 0.6% to $14.38 1/2 a bushel. CBOT July wheat fell 2 1/4 cents or 0.3% to $6.61 3/4‚ July KCBT Wheat dropped 3 1/2 cents or 0.5% to $6.830‚ and MGEX July wheat settled down 1/2 cent at $8.43 3/4. - I-Net Bridge