South African White Corn Drops by Daily Limit on Rain Forecastsby
Country has seen worst drought conditions since 1992
Some towns in Free State province received overnight rain
South African white corn fell by its daily trading limit as forecasters predicted rain in the coming week to give relief to drought-stricken crops in the country’s western regions.
White corn for delivery in July declined 2.6 percent to 2,999 rand ($211.07) per metric ton by midday on the South African Futures Exchange, meeting the 80-rand daily limit. The grain, used as a staple food in the country, has fallen for three days and is trading at the lowest intraday price since Aug. 19.
Weather maps “all show rain next week over the maize area and enough to make a difference," Brink van Wyk, a trader at BVG (Pty) Ltd., said by e-mail. "People also realized again that in western maize areas, farmers can still plant until the end of December, so there is plenty of time."
Yellow corn for delivery in December fell as much as 2.7 percent, also reaching the daily limit of 80 rand, to 2,913 rand a ton.
The town of Wepener in the Free State province, received 12 millimeters (0.5 inches) of rain last night, while region of North West did not get any, according to data on the South African Weather Services website. There is a chance that Kroonstad in the Free State area will get 5.1 millimeters of showers on Nov. 16 and the North West town of Potchefstroom could receive 5.6 millimeters, data on the yr.no weather website.
"If it does not rain next week, though prices will increase just as quickly," Van Wyk said.
South Africa is the continent’s biggest corn producer and the El Nino weather pattern has caused dry conditions in the sub-Saharan region. The nation’s worst drought since 1992 hurt crops in the Free State and North West provinces, which account for almost two-thirds of corn output last year.
"There are hopes in the market that the rain will materialize and this is what is driving the market," Wandile Sihlobo, an economist at the Grain SA farmers’ lobby, said by phone Thursday.