South African white maize futures hovered near a 18-month peak on Friday and traders said a recent rally could extend well into next year amid uncertainty about how much farmers would plant in the coming season.
The March contract closed seven rand or 0.65 percent higher at 1,087 rand ($171) a tonne after surging on Thursday to fresh highs since June 2004.
Prices initially eased on profit-taking to as low as 1,070 rand a tonne but the higher close showed the recent good run was far from over given fears that farmers may plant less as dry weather persists, traders said.
"It's probably a little too early to call an end to the rally. We could see this last to the new year quite easily," said one local dealer.
Second-month maize has gained 16 percent since November 21 when figures were released showing farmers intended to plant half the hectarage they did in the previous session.
But officials and traders say farmers may plant more given the recent price surge, meaning the rally may eventually peter out or even retreat to levels seen around March when prices fell below 500 rand a tonne as stocks piled up.
Chief Executive Johan Dique of Senwes, which operates in the main central and western maize growing regions, on Wednesday added his voice to concern that increased planting to compensate for a year of heavy losses could lead to another bear market.
But while concerns about next year's harvest remain, prices look set to stay solid above 1,000 rand a tonne.
"I'd have to agree with him (Dique) on that, but the big 'if' remains are farmers going to plant. That's what's driving up prices - uncertainty about what farmers are doing," the trader said.
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