South African maize futures ended flat on Friday after profit-taking eroded some of the gains of the past few weeks and the market looked set for a slight correction in the coming days, traders said.
Maize prices have rebounded in recent weeks, partly on fears that heavy rains would stunt crop growth and further reduce the final harvest but remain shy of the close to two-year peaks scaled in December.
Production has already been forecast to be nearly half last year's tally of 11.45 million tonnes. The Crop Estimates Committee on Thursday lowered its prediction to 6.060 million tonnes from 6.21 million, confirming trader talk that excessive rains had hurt yields since the last survey.
But one of the biggest threats to that rally has been stocks carried over from last year, which stood at a hefty 4.558 million tonnes at the end of February, the South African Grain Information Service (SAGIS) said on Friday.
Traders said although the figure fell from 5.179 million at the end of the previous month, it remained a bearish factor in a country where the national demand is only around 7 million tonnes.
"I'm a bit amazed. It's a lot," said one Johannesburg trader. "My first impression was that the market is going to come down."
He said in the following week the most-watched July white maize contract was likely to ease to around 1,120 rand a tonne after firming 23 percent since it scraped a 2006 low of 910 rand in early February.
SAGIS also said in its monthly bulletin that exports totalled 1.965 million tonnes from May 2005 to February compared to 1.743 million tonnes before. The figures were released shortly after the market closed.
July white maize eased 1 rand to 1,160 rand a tonne on Friday.
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