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Send  Print  Share  RSS  Twitter  11 Aug 2009

SA Grains: Maize futures up on CBOT, weaker rand

 
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Johannesburg, Aug 11 (I-Net Bridge) South African white maize futures ended higher on Tuesday on the back of a weaker rand and a stronger close on the Chicago Board of Trade overnight.
Wheat futures however ended lower in what traders said was a delayed reaction to the recent "pummelling" experienced on CBOT.
The August white maize contract ended 25 rand higher at 1,410 rand per ton, September maize was up 29 rand to 1,429 rand and December maize was up 30 rand at 1,492 rand, according to I-Net Bridge`s preliminary data.
"Maize futures ended firmer on the back of the weaker rand and a higher close on CBOT," a local grains trader said.
The South African rand sat in a tight range against the dollar in midday trade on Tuesday, with very little economic print to provide any firm
direction.
Shortly before the local grains market closed, the local currency was bid at 8.1037 to the dollar from a previous close of 8.0890.
In contrast to the maize futures, the August wheat contract lost 58 rand to 2,460 rand, while the September contract shed 38 rand to 2,480 rand per ton and December wheat lost 30 rand to 2,353 rand, according to the preliminary data.
"The weaker close for wheat is simply a delayed reaction to the pummelling wheat has taken on the CBOT recently," the trader said.
The local market was closed on Monday for the Women`s Day public holiday.
Dow Jones Newswires reports Chicago Board of Trade corn futures ended higher Monday amid short-covering as traders bought corn and sold soybeans, analysts said.
September corn ended up 2 1/4 cents at $3.24 1/4 a bushel, and December corn ended up 4 cents at $3.33.
Traders said there was no fundamental driver behind the day`s gains, but that at more than 3-to-1, the soybean-to-corn price ratio has gotten out of whack and is in need of a correction. November soybeans ended down 28 1/2 cents at $10.10 per bushel.
At some point, the spread will contract further, although that may not happen right away, traders said.
The market unexpectedly opened higher and remained firm throughout the session despite weather that is mostly considered bearish and an optimistic crop outlook.
"I think it`s tough to rationalize today`s trade," said Chad Henderson, an analyst with Prime Ag Consultants.
Henderson and others said the market was oversold after last week`s plunge. Analysts also noted positioning ahead of Wednesday`s crop production and supply-and-demand reports from the U.S. Department of Agriculture.
The market could move sideways into the report, with prices between $3.20 and $3.40 in the December contract, Henderson said.
Funds bought an estimated 5,000 contracts.
The USDA will issue its crop production and ending stocks forecasts Wednesday at 8:30 a.m. EDT. The trade is expecting the USDA to hike its production and carryout estimates, as the summer`s favorable weather fuels expectations of a strong crop.
Hot weather in the first half of August in the corn belt is mostly expected to have a beneficial effect on the crop, which is behind schedule.
Rainfall is mitigating any crop damage, analysts said.
However, the trade is still expecting a drop of 1 to 2 percentage points in the portion of the crop rated good-to-excellent in Monday afternoon`s USDA crop progress report.
By Ray Faure
I-Net Bridge,.
Copyright 2009 I-Net Bridge. All rights reserved

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