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Maize follows global prices lower

Maize and wheat prices ended lower across the board on Tuesday‚ on the back of softer prices in the US.

“Whatever the US does‚ we will probably do the next day. We are following world markets. There are reports out of the US of better weather and rain which drove prices a bit lower‚” said Rudi Swanepoel‚ trader at Farmwise in Johannesburg.

File image. Credit: REUTERS

“The market is very nervous with commodity prices having risen more than 50% in the last two months or so. The market is bullish and fundamentals are strong. The US sits on dismal stock‚ SA does not have ample stock and Asian markets need to buy. Either the price of maize is going to go through R3‚000 per ton or we are going to see the biggest sell-off ever‚” he added.

The near-dated August white maize contract was down R13 to R2‚690 a ton and the September white maize contract dropped R12.80 to R2‚708.20 a ton. The December white maize contract lost R19 to R2‚765 a ton.

The near-dated August yellow maize contract was down R15 to R2‚720 a ton‚ the September yellow maize contract lost R22 to R2‚729 a ton and the December yellow maize contract shed R16 at R2‚744.

The August wheat contract was down R24 at R3‚377 a ton‚ the September wheat contract shed R21 to R3‚395 a ton and the December wheat contract dipped R15 to R3‚410 a ton.

Meanwhile US soybean futures fell sharply on Monday as favourable weather for soy crops‚ at a critical stage in their development‚ raised the prospect of better yields at harvest.

Analysts said that traders who bet on prices rising after a historic drought cut US soybean production took profits on prior gains as cooler‚ wetter Midwest weather was expected to benefit soybean crops‚ Dow Jones Newswires reported.

There is a general assumption in the marketplace that the improved forecast was stabilising soy-crop conditions and maybe adding bushels to US production‚ said Tregg Cronin‚ market analyst with brokerage Country Hedging.

The US soybean crop is in its critical development stage‚ giving the crop time to offset some of the summer's historic droughts impact if rainfall is adequate. During the important growing phase‚ soy plants set their pods and fill them out with beans.

Further rains forecast this week could also benefit crops‚ Cronin said. “There is definitely a feeling we have already seen the worst from a historic US drought‚ with potential for soybean yields to improve in subsequent government crop reports‚” he said.

CBOT December corn settled down 17 cents‚ or 2.1%‚ at US$7.92 1/4.

US wheat futures fell in tandem with corn and soybeans‚ garnering additional weakness from favourable yield reports from the spring wheat harvest.

CBOT September wheat ended down 28 1/2 cents‚ or 3.2%‚ at $8.56 3/4‚ KCBT September wheat ended down 25 cents‚ or 2.8%‚ at $8.68‚ and September MGEX wheat settled 24 1/4 cents‚ or 2.6%‚ lower at $9.11 1/4. - I-Net Bridge

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