Johannesburg - South African wheat climbed to the highest level in at least 18 years as a weaker rand made imports of the cereal more expensive.
Corn rallied as weather forecasts show no rain in the country’s main growing regions.
Wheat for delivery in December climbed 1 percent to R4 388 ($316) a metric ton by midday on the South African Futures Exchange in Johannesburg, the highest since trading started in November 1997. The rand has lost 17 percent against the dollar this year and traded as weak as 13.9958 to the US currency on Thursday. It dropped to a record-low 14.1588 on September 29.
The price of wheat will only come down “if the currency strengthens,” Brink van Wyk a trader at BVG, said by email.
The nation’s Crop Estimates Committee has reduced its forecast for grain plantings and harvests because of the dry weather throughout growing areas. Wheat production may decline to the smallest amount since 2011, while the corn area for 2016 will be the smallest in five years, it said October 27. While the nation is the sub-Saharan region’s biggest producer of wheat after Ethiopia, it’s still a net importer, according to US Department of Agriculture data. It’s the continent’s largest corn grower.
White corn for delivery in December climbed by the R80 daily limit to R3 319 a ton, gaining a fourth day. Yellow corn rose 0.7 percent to R3 020, after touching R3 080 in intraday trading, the highest since August 1996.
“This morning the two-week forecast showed less rain,” Van Wyk said. “Maize will only come down if decent rains are forecast,” he said, using the local term for corn.
Little to no rain was predicted for Thursday, Friday and Saturday for Free State and North West province according to yr.no, a joint service by Norwegian Meteorological Institute and the Norwegian Broadcasting Corporation and which provides information on South Africa.
BLOOMBERG