South Africa maize futures tumbled to six-month lows on Friday in response to falling Chicago prices, with traders saying the move heralded a decisive break lower in the coming fortnight.
The benchmark July white maize contract fell 25 rand to 1,019 rand a tonne - its biggest drop in four weeks - after futures on the Chicago board of Trade fell on bearish weekly export sales and as world crop data sparked long liquidation.
"It's all Chicago," said one trader in Johannesburg.
"The market has been down the whole week and it wasn't even reacting to Chicago then, so I reckon if the US holds these levels we could test the lower 900s in the next two weeks."
South Africa maize prices often mirror peaks and troughs in the main US market to remain competitive, however traders stress that current prices will have to drop another 200 rand if South Africa is to grab a slice of the deep-sea export trade.
At present South Africa's exports are confined to arid neighbours such as Botswana or nearby countries with food shortages such as Zimbabwe.
The most-traded July yellow maize contract fell 25.8 rand to 1,018 rand a tonne - also a six month low.
Comments
Comments are closed.