White maize futures plumb 14-month low

19.01.2017

White maize futures in South Africa plumbed 14-month lows, after much needed rain suggested good growing conditions after last season's harsh drought.

Ideas are growing for planted area and potentially yields, thanks to rains during the planting period with more to come.

March white maize futures settled down 1.1%, at 3,322 rand a tonne, having reached down to a 14-month low of 2,259 a tonne.

Good conditions…

 "South Africa's maize crop is in a fairly good condition. Moreover, weather forecasts suggest that high rainfall pattern will return to the maize areas next week after a brief pause over the past few days," said Wandile Sihlobo, at Agbiz.

"The weather forecast shows a possibility of light showers across the South Africa within the next eight days," said Mr Sihlobo said, noting that the rain could "slightly improve soil moisture and dam levels, and in turn, benefit summer crops".

A survey by Reuters released on Wednesday showed expectations of maize sowings up 33.5% year on year, with average expectations at 2.6m hectares.

This is some 400,000 hectares higher than a forecast made by the South Africa's Crop Estimates Committee.

The CEC will release an updated area forecast next week.

…but armyworms are marching

But there are still some clouds on the horizon, with an armyworm infestation spreading across Southern Africa, affecting Zambia, Zimbabwe, and Malawi so far.

"The extent of the damage is unclear at this stage, but a sizable area across these countries have been affected," Mr Sihlobo said.

"Fortunately, there are no cases reported for South Africa, but producers and agribusinesses along the borders should remain cautious."

"Given these recent developments, there is a higher possibility that southern Africa could again be a net importer of maize this season," said Mr Sihlobo.

"Such developments might have a direct implication on South Africa's maize market, as a key producer in the region."


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