South Africa white maize futures scale 11-month peak on hot, dry conditions

15th January 2018 By: Reuters

South Africa white maize futures scale 11-month peak on hot, dry conditions

South African white maize futures prices hit 11-month highs on Monday as a spell of hot, dry weather raised concerns about plantings and yields over a swathe of the maize belt.

Maize is South Africa's staple crop and policy makers such as the central bank, which will meet later this week on interest rates, monitor its price because of its implications for inflation, especially for lower-income households.

The contract for delivery in March rose over 2% to 2,123.80 rand a tonne, its highest level in 11 months, before easing back to be 1.35% higher at 2,098 rand, according to Reuters' data.

Industry group Grain SA said last Monday the western part of South Africa's maize belt had been hit by drought and farmers there had only planted 70% to 75% of the area they had intended to put in the ground, with the growing season near its midpoint.

Weather conditions across a swathe of the maize belt have remained mostly hot and dry since then.

In October, South Africa's official Crop Estimates Committee said farmers were expected to plant 6% fewer hectares of the staple grain in the 2017/2018 season, after last year's record harvest of over 16.7 million tonnes depressed prices.