Johannesburg - Yellow corn in South Africa, the continent’s largest producer of the grain, climbed to the highest level in more than 19 years as the nation’s dry spell continues in the crop’s main growing regions and after the US reduced its forecast for domestic output.
Yellow corn for delivery in December rose 1.9 percent to R2 957 ($218) a metric ton on the South African Futures Exchange, the highest closing level for a most-active contract since February 1996, when trading started. It touched R2 977 during trading. White corn for same-month delivery increased 1.1 percent to R3 229 a ton, gaining a sixth straight day.
Both the Free State and North West provinces, which accounted for almost two-thirds of corn output in 2014, didn’t receive rains on Sunday, according to data on the South African Weather Service’s website. The worst drought since 1992 this year hurt crops and prompted the nation to start importing the grain after producing the biggest harvest in 33 years in 2014.
“The weather maps for the next week still look dry and that would still buy support for the prices,” Warren Langridge, a trader with Sigma Option Writers in Hermanus, South Africa, said by phone.
The US Department of Agriculture on September 11 cut its harvest estimate for corn by 0.7 percent to 13.6 bushels (345 million tons) from its previous prediction, helping raise prices, Langridge said. The US is the world’s biggest producer.
The drought has caused local prices of white corn, used to make a staple food known as pap, to surge 50 percent this year. That of the yellow type, used mainly as animal feed, has risen 36 percent.
BLOOMBERG