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South Africa faces tight white corn market

South Africa faces tight white corn market

White corn futures in South Africa extended losses to a fresh 14-month low, but import data out after the mid-day close showed no imports at a time of tight stocks.

Best-traded march white corn futures finished down 2.0%, at 3,188 rand a tonne, the lowest level for the third-month contract since November 2015.

Prices are under pressure from the good crop prospects for this year, as well as the stronger rand.

No imports this week

But Sagis figures, out after the market closed, showed no white corn imports between January 14 and 20. Yellow corn imports came in at 21,855 tonnes, the highest in two weeks.

Wandile Sihlobo, suggested that the surprising lack of imports, at a time of tight stocks, might be down to disruptions.

He noted as-yet unsubstantiated rumours that a cargo of white corn had been damaged in a South African harbour, which could have been part of the reason for the lack of imports.

Stocks data

Mr Sihlobo said that South Africa is likely to have to import some 300,000t tonnes of white corn before the next harvest, in order to make up for tight stocks after two years of drought.

Wednesday will see Sagis release stocks data.

Mr Sihlobo said that the data was likely to show South Africa “sitting on tight stocks,” which could be supportive to prices.

Armyworm threat

South African corn production is threatened by an infestation of armyworms, with government officials saying that the pest has now spread across Malawi.

The spread of army worms across Southern Africa has been fast, in part due the fact that the small scale of most farms means less responsive use of pesticides.

In such an environment, Mr Sihlobo said, “to make sure that you distribute the chemicals gets to be a bit of a problem”.

South African farmers may be better prepared to defend against armyworms, but prices could still be supported by the infestation.

“Most countries will look to South Africa for imports,” Mr Sihlobo said.  “South Africa should get ready for regional demand.”

Wheat markets wait for clarity

South African wheat imports came in at 43,240 tonnes, with shipments coming from Argentina from the first time in the season that started in October.

Mr Sihlobo said that wheat imports were under pressure from ideas that the import tariff might be altered.

The treasury has said it will consider reforming the tariff, to allow for better importer profits.

“I’m seeing reports that we will know roundabout March,” said Mr Sihlobo.

“Traders are sitting back until they see what the clarity is going to be on import tariffs,which is why south Africa is seeing quiet trade on the wheat market.”

(Source – http://www.agrimoney.com/news/south-africa-faces-tight-white-corn-market–10374.html)

South Africa faces tight white corn market Reviewed by on . White corn futures in South Africa extended losses to a fresh 14-month low, but import data out after the mid-day close showed no imports at a time of tight sto White corn futures in South Africa extended losses to a fresh 14-month low, but import data out after the mid-day close showed no imports at a time of tight sto Rating: 0

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