South African maize prices surged to fresh 2006 highs on Friday as worries mount about the impact of wet and cold weather on this season's harvest.
The July white maize contract added 2.4 percent during the session to end at 1,170 rand a tonne after touching 1,172.80 - its highest since December 29.
Its gains on the week stood at 7.2 percent. "I think the July contract is going to 1,200 rand and then it is going to pull back. There's still a lot of uncertainty about the impact of cold and wet weather on the crop," said a trader at a major local bank. Other traders have also said that 1,200 rand looks like the target for the July contract.
Rains were excessive this summer after a relatively dry start to the growing season and lingered into the southern hemisphere autumn over much of the grain belt - which is unusual though not unprecedented. The weather has also been unseasonably cold in recent weeks, raising concerns about early frosts in some areas.
South Africa last month cut its forecast of the coming season's crop by 2.3 percent to 5.92 million tonnes and said the final harvest might be even lower if wet weather continued. The next forecast is due on May 23. The staggered nature of planting this season has also clouded the picture after many farmers planted late in response to a December price rally and tardy rains.
"I think about 30 percent of the crop was planted after December and that chunk will lose 20 percent of its yield," the trader said. Farmers have expressed concern about their crops. "As I'm standing on my lands at the moment I see a lot of maize stalks with crop rot at the bottom. That will influence the quality of the grade as well as the yield," one North West farmer told Reuters.
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