South African maize prices finished the trading session sharply lower on Tuesday‚ due to offloading of long positions by traders‚ and because of a stronger rand and lower US prices.
“Maize closed a lot lower today‚ down R80‚ the maximum amount it is allowed to fall on one day‚” said Piet Faure‚ trader at CJS Securities.
White maize for December delivery‚ the most active contract on the South African Futures Exchange‚ dropped 3.34% to close at R2‚312 a ton. Meal made from the grain is SA’s staple food.
Yellow maize for December delivery shed 3.19% to R2‚304 a ton. The grain is used mainly as animal feed in SA.
Wheat for December delivery slipped 0.34% to R3‚506 a ton.
“The market was too long and the crop estimates committee will release it final estimates for the maize marketing season tomorrow. The last estimate a month ago was 11.17m tons of maize and is expected to rise to 11.28m tons because of increased deliveries to local silo’s‚” he said.
“Certain traders have been caught with long positions and are now off-loading these. Our maize stock is tight at the moment. We might export more white maize to Mexico and South Korea this marketing year‚ because our prices have come down and are more attractive to those importers‚” he added.
SA has the best quality white maize in the world‚ which is produced in the Northwest and the Free State.
“There is talk of Asian countries like South Korea looking to import maize from SA‚ because they want to substitute wheat with maize‚” he added.
“Because of the void left by the US due to the drought there‚ SA‚ Brazil and Argentina will continue to be sources of maize‚” he said. - I-Net Bridge