The benchmark South African maize futures ended mixed on Monday, driven by a weaker rand currency and a good weather outlook. White maize for March delivery, the most traded maize contract on the South African Futures Exchange (SAFEX) closed 1.18 percent firmer at 1,802 rand a tonne, while yellow maize for delivery in that month fell 0.82 percent to 1,701 rand a tonne.
"We really didn't have any news locally to move the market today so we basically were quite flat," a trader said. "The rand was a bit rangebound during the session, even though there was some weakness there, and the weather outlook is still quite positive." The exchange rate of the rand against the US dollar has been a major driver of grain prices in South Africa.
A weaker rand makes South African products cheaper and more attractive for foreign buyers. The main March wheat contract ended higher, rising 1.06 percent to 2,869 rand a tonne. "It looks like it was mostly the currency moving wheat today," another trader said. South Africa, a net importer of wheat, raised its 2008 wheat output forecast to 2.08 million tonnes from a previous estimate of 2.02 million tonnes last week, attributing the expected increase to a rise in farmers' deliveries to silos since its last estimate in December.
The country consumes about 2.8 million tonnes of wheat a year. It may have to seek alternative supplies of the grain this year, probably from either the United States or Germany, after top global producer Argentina said last week it was rejecting applications for wheat export permits to safeguard local availability. Argentina is a top-five global wheat exporter but, due to drought, the 2008/09 wheat crop is predicted to be the smallest in 20 years, according to the Buenos Aires Grains Exchange.
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