South African corn futures headed for the sixth straight weekly drop as global contracts declined on signs of slowing demand in the U.S. after the worst drought since 1956 drove prices to a record.
White corn for December delivery, the most active contract, decreased 2.3 percent to 2,393 rand ($290) a metric ton by the close on the Johannesburg-based South African Futures Exchange, extending its retreat this week to 5 percent. The generic contract for the grain has had the longest losing streak since January 2010.
U.S. corn headed for the biggest weekly drop in three months as export sales tumbled 88 percent to 69,878 metric tons in the week to Sept. 13 from a year earlier, the lowest for the date since at least 2003, government data show. Corn futures in the U.S., the world’s biggest producer of the grain, had rallied to an intraday record of $8.49 a bushel Aug. 10.
“We are following the U.S price,” Thys Grobbelaar, an analyst at Klerksdorp-based Senwes (Pty) Ltd., said by phone. “Low prices encourage users of the seed to purchase more, but it is bad news for the farmer planting the seed.”
South Africa is the continent’s largest producer of corn. The white variety is the nation’s staple food while yellow corn is mainly used for animal feed.
The country’s corn stocks increased 11 percent to 7.36 million tons by the end of August, the Pretoria-based South African Grain Information Service said on its website today. In July, stocks advanced 28 percent to 7.44 million tons, the highest since October 2010, the service said on Aug. 23.
Yellow corn for delivery in December, also the most active contract, dropped 2.3 percent to 2,380 rand a ton. December-delivery soybeans declined 1.8 percent to 5,625 rand a ton. Wheat increased 0.8 percent to 3,520 rand.