South African maize futures ended on a positive note on Thursday, as they tracked the Chicago Board of Trade (CBOT) higher.
The January 2012 white maize contract gained R19 to R2,499 per ton, the March 2012 white maize contract was up R10 to R2,460 per ton, while July 2012 white maize added R20 to R1,967 per ton, according to preliminary I-Net Bridge data.
The January 2012 yellow maize contract gained R16 to R2,511, the March 2012 yellow maize lifted R26 to R2,429 per ton and the July 2012 yellow maize contract edged up R37 to R1,945 per ton.
The January wheat contract was flat at R2,660 per ton, while the March wheat added R39 to R2,708 per ton, and the July 2012 wheat contract rose R40 to R2,760 per ton.
“Looks like we took our cue from US market, earlier, the rand was weaker against the dollar - I think that spurred the market a bit too,” a trader noted.
Another trader said: “You might find a bit of position squaring ahead of the long weekend, but volumes are desperately low. It's so quiet any buying that's coming into the market is actually pulling the market quite substantially.”
At 12:30 the rand was at R8.2205 to the US dollar from R8.2322 previously.
Meanwhile, Dow Jones Newswires reported that US grain and soybean futures ended higher on Wednesday, continuing to push to new multiweek highs as investors evened trades ahead of the Christmas holiday.
Traders taking positions off the books before the end of the year fuelled buying across the three major crops of corn, wheat and soybeans, said John Kleist, senior analyst with ebottrading.com.
The three markets are correcting from multimonth lows established in recent weeks.
“A clear signal that the rally is not new buying, but short covering is reflective of the amount of open positions in the market, or open interest, dropping in each of the last five-days that soybeans have closed higher,” said Kleist.
There was no new fundamental reason to spark the gains, but the rally shows how resilient the markets are during this upswing, Kleist added.
Short covering ahead of the end of the month, quarter and year provided market support, with traders looking to limit risk exposure as many prepare to take a break during the Christmas and New Years' holidays.
Meanwhile, lingering concerns about weather in Argentina and Brazil continued to entice traders into adding risk premium due to the potential threats to crops there. South America is the main competition for US. exporters, and smaller crops there would likely mean greater demand for US supplies.
Price pressure was seen across grain and soybean futures initially, as showers moving through Argentina eased concerns about threats to South American crop yields.
However, futures quickly rebounded, with buyers encouraged by the lack of selling pressure emerging from the price break and the US dollar retreating from earlier gains.
Light holiday volume limited further price advances, as traders' reluctance to take on risk before the holiday limits investor participation.
Nevertheless, traders continue to put a little value back in the market, as conditions had become oversold after slumping in the past two-months.
CBOT March corn ended up 9 1/2 cents at $6.16 1/2 a bushel.
CBOT March soybeans ended up 8 3/4 cents at $11.63 1/4 a bushel.
CBOT March wheat ended 9 1/4 cents higher at $6.17 a bushel, KCBT March wheat finished 3 cents higher at $6.71, and MGEX March wheat closed 2 1/2 cents higher at $8.41 3/4. - I-Net Bridge