South African corn prices rose the most since October on concern local stocks are being depleted by exports while global supplies will be curbed by a drought in South America.
Since the May 1 start of the marketing season, South Africa has exported 1.96 million metric tons of corn, according to the South African Grain Information Service, an industry body. In the whole of the preceding market year South Africa shipped 2.07 million tons.
“About 200,000 tons are still expected to be exported between January and March and this will take away the extra stock,” Brink van Wyk, a trader at Bosveld Graan (Pty) Ltd., said in an interview from Pretoria today. “This automatically means higher prices.”
White corn for March delivery rose 3.1 percent to a record 2,644 rand ($328) per ton on the South African Futures Exchange in Johannesburg today, its biggest jump since Oct. 21. Yellow corn for July delivery advanced 3.7 percent to 2,035 rand a ton, its largest gain since Oct. 12.
South African corn stocks plunged 40 percent to 4.18 million tons as of the end of November from a year earlier, South African Grain said on Dec. 22.
In South Africa white corn is used to make corn meal, a staple food, while yellow corn is mainly fed to animals.
South American Drought
Most corn-growing areas in Argentina, southern Brazil and Paraguay have received less than half of their average rainfall since Dec. 1, according to T-Storm Weather LLC, a Chicago-based weather forecaster. Argentina is the world’s second-biggest corn exporter after the U.S. and normally starts reaping its crop in March.
“More and more people are buying corn because they are concerned about the shortages in supply due to the drought,” Benjamin Swanepoel, a trader at Trademar Futures, said in an interview from Johannesburg.
Two cargoes of yellow corn from Romania are en route to ports in South Africa’s Western Cape province, Jannie de Villiers, chief executive officer of Grain SA, a farmers’ group, said in an interview. The imports would be the first of yellow corn since the 2009/10 season. South Africa has only imported yellow corn from Argentina, Brazil, the U.S. and China over the last nine years, according to South African Grain data.