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Maize‚ wheat higher on weaker rand

5 Jul 2012

South African maize and wheat prices ended higher on Wednesday on the back of a weaker rand‚ which results in international buyers paying less for local produce.

Maize and wheat prices were also fuelled by concerns that US Midwest dryness was robbing the maize and soybean crop's yield potential‚ although some traders expected cooler weather next week‚ with possible rains for the north western and eastern American maize belt.

"Maize was down for the large part of the day‚ but closed quite strong from this morning‚ due to a weaker rand‚" Hansie Swanepoel‚ maize trader at Vrystaat Mielies in Potchefstroom‚ said.

"Wheat also showed strong gains‚ with the December contract adding R19 to R3 188; it was trading under R3 000 not too long ago. These gains came on the back of drought in wheat producing Russia‚" he said.

The near-dated July white maize contract was up R9.80 to R2 237.80 a ton‚ September white maize gained R10.00 to R2 280 a ton and December white maize garnered R3 to R2 339 a ton‚ according to preliminary I-Net Bridge data.

The near-dated July yellow maize contract added R7.00 to R2 215 a ton‚ the September yellow maize contract lost R2 to R2 245 a ton and the December yellow maize contract climbed R3 to R2 305 a ton.

The July wheat contract edged up R22 to R3 225 a ton‚ September wheat gained R26 to R3 286 a ton and the December wheat contract was up R19 at R3 188 a ton.

Dow Jones Newswires reported that wheat futures were little changed today. Risk manager FCStone Europe said a recent fall in traded volumes was most likely a result of the US Independence Day holiday‚ with Paris open to some choppy trading in this session. The risk manager added it was likely that EUR245/ton may be touched in the very near future‚ with EUR241/ton offering initial near-term resistance.

Meanwhile overnight extension of a powerful rally for US grain futures would support Australian wheat values again on Wednesday. CBOT July maize futures rallied to nearly 10-month highs on Tuesday and CBOT wheat futures followed that lead. Traders were nervous about US crop yields being compromised by summer heat‚ while the possibility of dry weather conditions threatening wheat crops in the Black Sea area‚ northern China and Australia‚ added strength.

Higher maize prices could increase demand for wheat to replace maize in animal feed. CBOT September wheat rose 26.75 American cents‚ or 3.5%‚ to US$7.9925/bushel.

Source: I-Net Bridge

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