SA maize at 2-1/2 year high

File photo.

File photo.

Published Jul 14, 2011

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South African maize futures scaled new 2-1/2 year highs on Thursday as technical factors and healthy exports pushed prices up, and more gains were expected.

The most active December white maize futures contract closed 1.53 percent up at 1,893.60 rand ($278.39) a tonne, while yellow maize for delivery in the same month was 2.5 percent higher at 1,878 rand a tonne.

Charts point to further gains, though the contract remains well off the lofty peaks of over 2,400 rand a tonne it reached in July 2008 when global food prices were red hot.

“There is a very bullish pattern aiming for 2,000 rand at the moment,” said George Glynos, managing director at financial consultancy ETM.

He said the next key technical levels that could propel prices higher were at the level of two prior highs of 2,008 and 2,019 rand.

Prices have risen despite a bumper crop, a strong rand and large harvests in traditional regional markets such as Zambia and Malawi.

This is because export markets have opened elsewhere, and technical factors and global price trends have also combined to push them higher, fanning domestic food inflation at a time when unions across South Africa's economic sectors are demanding double-digit wage hikes. - Reuters

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