South African White Corn Gains by Extended Limits as Rand Slumpsby
Currency drops to record as finance minister replaced
President replaces Nhlanhla Nene with little-known lawmaker
South Africa white-corn futures jumped by an extended limit in Johannesburg after the rand fell to a record low against the dollar, making imports of the grain more expensive and boosting the attractiveness of local varieties.
White corn for delivery in July rose 3.2 percent to 3,860 rand ($256) a metric ton by midday on the South African Futures Exchange. Futures rose a fourth straight day, extending trading limits to 120 rand after the contract moved by the 80-rand limit in the previous two sessions. Yellow corn for delivery in March increased 1.3 percent to 3,419 rand a ton.
The currency dropped to an all-time low of 15.3857 per dollar Wednesday before paring losses in overnight trading after South African President Jacob Zuma fired Finance Minister Nhlanhla Nene and replaced him with a little-known lawmaker.
“The dry conditions still have an impact on the maize prices, but today’s higher levels were mostly propelled by the weakening of the rand," Wandile Sihlobo, an economist at the Grain SA farmers’ lobby, said by phone on Thursday.
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 in 23 years hurt crops in the Free State and North West provinces, which accounted for almost two-thirds of corn output in 2014. White corn, which is consumed by humans as a staple food, locally called pap. has surged 80 percent this year, while the yellow variety, fed mainly to animals, climbed 58 percent.