South African maize farmers might be in for a better year in 2006, after being battered by price slumps over the past season that many said threatened their livelihood.
But market watchers say prices could once again approach four-year-lows seen earlier this year if farmers plant maize at the last minute following a recent rally.
NKC analyst Hugo Pienaar said a survey on farmers' planting intentions to be released in January would be key.
"I think we might get a better idea next year when the Crop Estimates Committee releases that," he told Reuters. "I think that report might set the trend in the early stages of the year and then of course the weather."
Official estimates have predicted since September that farmers would plant much less than in the past season, helping push prices to 22-month highs.
Second-month white maize futures have gained over 30 percent since September and with the area planted likely to be far less next year, farmers could reap rich rewards.
High prices are normal for this time of year when there is uncertainty around the coming year's crop. But some traders are thinking ahead and say while a current carry-over stock of around 7 million tonnes should be enough to supplement a smaller harvest next year, 2007 could be a different story.
An official survey released in November showed farmers would plant less than half the amount of land compared to the past season amid drought fears and concerns about the price they could fetch.
"We do have a high carryover this season but the next one can be as low as 1.5 million tonnes. Now that's making the assumption you get a 3 tonne a hectare yield. If the weather goes awry the whole thing can change," a trader at a major agricultural firm said.
Farmers have over the past year repeated calls for the government to help save an ailing industry, hit by persistent dry spells, post-apartheid deregulation and its diminishing role in an increasingly industrialised and service-driven economy.
Prices dived as low as 496 rand a tonne in February, which farmers say is less than half the price they need just to break even.
Some market watchers say this scenario could easily be repeated and point out that even if only a third of the past season's hectarage is planted the country would still sit with huge maize stocks.
Both Intentions to Plant surveys so far have been below traders' expectations and farmers Reuters has spoken to say it would be nearly impossible to sow more before the end of the planting season in January. But there are still those who insist the recent rally will be too hard for farmers to resist.
"By all accounts it sounds like there's a good bit of planting going on in the North West area. My reports are there are more plantings in Mpumalanga province than previously thought," another trader added.
"The prices are incredibly good for farmers. Everywhere farmers have planted except the western Free State."
In its second Intentions to Plant survey published last month the committee predicted maize farmers would plant 1.372 million hectares, down from a previous 2.93 million hectares.