May 14 (Bloomberg) -- White corn in South Africa, the continent’s biggest producer, rose the most in more than three weeks as a technical indicator signaled that the grain’s price had fallen too low.
White corn for delivery in July increased 0.9 percent to 1,933 rand ($187) a metric ton by the midday close on the South African Futures Exchange. That’s the biggest advance for a most active contract since April 17. The grain’s relative strength index is 22.9. Readings lower than 30 indicate a potential impending increase to some analysts who study technical charts. The gauge has been below 30, or oversold, since April 23.
“We were strongly oversold and there was a correction by the market,” Thys Grobbelaar, an analyst at Klerksdorp-based Senwes Ltd., said by phone.
South African corn prices, which reached a record in March, have declined 31 percent this year, almost wiping out 2013’s 32 percent gain. Prices plunged after the nation’s Crop Estimates Committee said in March that the next harvest may be the biggest in 33 years, easing stock constraints caused by a drought that curbed the previous harvest. Meal from white corn is cooked to make one of the country’s staple foods, known as pap, and the yellow variety is mainly used as animal feed.
The yellow type climbed 0.1 percent to 2,065 rand a ton. Wheat gained 0.1 percent to 3,985 rand a ton.
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