Maize gains most in 3 monthsComment on this story
Johannesburg - White maize in South Africa gained the most in more than three months by the midday close in Johannesburg as a technical indicator signaled that prices had fallen too far.
The yellow variety also increased.
The white maize contract for delivery in December gained 3.2 percent to 1,748 rand a metric ton on the South African Futures Exchange.
That was the biggest move for a most-active contract since March 25.
The grain’s 14-day relative strength index reached 40 today.
Between June 30 and July 9 it was below 30, the level that suggests a potential impending rebound to some analysts who study charts.
Prices have dropped 38 percent this year.
South Africa’s farmers will produce 13.9 million tons of maize in the 2014-15 season, according to the country’s Crop Estimates Committee, which would be the biggest harvest since 1981.
Technical indicators show “very strong oversold conditions and this is a technical correction,” Thys Grobbelaar, an analyst at Klerksdorp-based Senwes, said by phone.
The nation is Africa’s biggest producer of maize.
Meal from white maize is used to make a staple food known as pap.
The yellow variety is used for animal feed.
Yellow maize for delivery in December rose 1.6 percent to 1,828 rand a ton.
Wheat for delivery in the same month gained 0.6 percent to 3,531 rand a ton. - Bloomberg News