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Muted local reaction to Chicago gains

21 Aug 2013

South African maize futures closed mixed on Tuesday (20 August) as there was a muted local reaction to overnight gains in Chicago‚ which sets the international benchmark for grains.

"Maize futures should have gained some R40 per ton based on Chicago's close‚ but instead we had a very muted reaction with September up only R1.20 per ton‚ while December closed down 80c‚" Vrystaat Mielies trader Hansie Swanepoel said.

The September white maize contract added R1.20 to R2‚299.20 per ton‚ December white maize shed 80c to R2‚343.20 per ton and the March 2014 white maize contract rose R4 to R2‚339 per ton.

September yellow maize closed R2 firmer at R2‚148 per ton‚ with the December contract up R1 to R2‚195 per ton and the March 2014 contract added R5 to R2‚177.

September wheat shed R13 to R3‚481 per ton‚ but December wheat added R6 to R3‚350 per ton.

Dow Jones Newswires reported that grains futures rallied on Monday (19 August) on worries about unfavourable weather and deteriorating crop conditions.

Forecasts call for dry weather in the next seven days in southern and western parts of the farm belt‚ including southern parts of Nebraska‚ Iowa and Illinois. Hot temperatures are also expected for the next two weeks.

Further fuelling worries about crops‚ participants on the first day of an annual corn and soybean Midwest crop tour reported seeing fields where conditions were not as good as expected‚ despite being healthy overall. The tour will release official yield estimates as it continues through states from Nebraska to Ohio this week.

Technical trading also drove gains in corn‚ leading the grain to rise by a larger percentage than soybeans during the session. Technical traders saw it as a bullish signal that corn futures jumped last week‚ breaking out of a downward-trending channel where prices had traded for about two months.

Wheat futures were pulled higher by corn futures‚ since the two grains are substitutes in animal feed. Wheat prices also rose on better than expected export inspections in the weekly USDA report.

Source: I-Net Bridge

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