South African maize futures ended Thursday's session mixed.
The March 2012 white maize contract was down R24 to R2,672 per ton, May 2012 white maize added R23 to R2,398 per ton, and July 2012 white maize firmed R1,80 to R2,039.80 per ton, according to preliminary I-Net Bridge data.
The March 2012 yellow maize contract was down R58 to R2,666 per ton, but the May 2012 yellow maize contract was up R13 to R2,353 per ton and the July 2012 yellow maize contract was flat at R2,100 per ton.
The March wheat contract receded R25 to R2,795 per ton, while May wheat dropped R27 to R2,838 per ton, and the July 2012 wheat contract was down R11 to R2,895 per ton.
“It looks as though there was a bit of pressure on the old crop (March). I think this will probably be confirmed by the stocks that come out tomorrow in the monthly bulletin. But definitely the old crop was under pressure - farmers are bringing stock to the market as they don't want to carry it too long into February before the new crop comes in. The new crops went sideways today - there was nothing much there, however there was support for May,” a trader said.
He added that the US market seemed to be edging higher, but rand strength had kept everyone on the side-lines.
“Despite uncertainties in terms of weather and Argentina there is still fairly good demand coming through in the US. The weaker dollar also supported the commodities, but today the two cancelled out - that's why we had a mixed bag,” the trader added.
At 12:20 the rand was at R7.8389 to the US dollar from R7.8736 previously.
Dow Jones Newswires reported that US corn and wheat futures ended higher on Wednesday, advancing for the fifth consecutive day amid firm cash prices and optimistic outlooks for export demand.
Wheat futures led the rise in prices once again, as traders reduced risk by covering short positions amid hopes for increased export demand.
Traders are hopeful Russia will restrict its wheat exports, which may open up opportunities for US export demand.
The wheat market is desperate for an increase in demand, particularly with world wheat supplies estimated at near record levels, said Shawn McCambridge, senior grains analyst with Jefferies Bache in Chicago.
The optimism for export demand provides psychological support from a market burdened with large inventories and limited export demand, said McCambridge.
The export hopes and rallying corn futures were enough to shake loose some of the record shorts in the market, he added.
A short position is a bet that prices will move lower. Wheat is tied to corn, as both compete as feed for the livestock industry.
Nevertheless, despite the recent push in prices, in reality the wheat market remains straddled with ample world supplies a feature that will limit longer-term price strength for the market, McCambridge added.
CBOT March wheat ended up 7 3/4 cents at US$6.41 1/4 a bushel, March KCBT wheat ended up 11 cents at $6.97, and March MGEX wheat finished up 9 cents at $8.12 3/4.
Corn futures ended higher, as strong cash markets and continued worries about South America's crop kept buyers enthused. With farmers in a good financial position, they don't have to sell supplies to generate cash flow, and that is tightening available supplies.
A tighter cash market encourages traders to boost futures prices in hopes of prying loose supplies from farmers. Currently, exporters and processors are waged in a bidding war for supplies, forcing grain prices higher.
Meanwhile, declines in the crop estimate for Argentina and Brazil provide support for prices as well, with analysts expecting world buyers to shift interest to US supplies on threats to Latin American crops, McCambridge said.
CBOT March corn ended up 4 1/4 cents to $6.34 1/2 a bushel. - I-Net Bridge