Johannesburg - South African wheat climbed to a 17-month high as a weaker rand made inbound shipments more expensive for the country that’s a net importer of the grain.
Wheat futures for delivery in December rose as much as 0.8 percent to R4 111 ($317) a metric ton, the highest since March 2014. Prices are up a fifth day in Johannesburg.
South Africa’s rand weakened to the lowest level in almost 14 years against the dollar.
While the nation is the sub-Saharan region’s largest grower of wheat after Ethiopia, it is a net importer of the grain, US Department of Agriculture data show. Farmers are forecast to plant the second-smallest area ever, according to the country’s Crop Estimates Committee.
The rand has a direct impact on wheat prices because South Africa imports about half of its requirements, Brink van Wyk, a trader at BVG, said by e-mail.
Wheat was up 0.5 percent at R4 100 by 12:09 pm in Johannesburg on the South African Futures Exchange. Futures gained 2.5 percent this year after rebounding from a five-month low in April.
South African growers are expected to sow 478 300 hectares (1.2 million acres) with wheat in 2015, according to the CEC. While that’s 0.4 percent more than last season, it would be the second-smallest area on record, it said.
The committee will release its first production forecast and revised area data on August 26.
BLOOMBERG