The South African Futures Exchange (SAFEX) said on Tuesday it would reintroduce the grade 2 white maize contract from Wednesday for the first time since 2003, the latest sign that the quality of the crop has suffered.
"Responding to a number of requests from the market and confirmation from various storers of the actual tonnages of white maize grade two (WM2) currently being received, the exchange has decided to re-introduce the WOPT contract that last traded in 2003," SAFEX said in a statement.
The last second grade maize contract was for March 2003.
"The exchange will introduce an Aug06, Sep06 and Dec06 expiry for trading on Wednesday 12 July 2006 followed by the relevant Oct06 and Nov06 constant month contracts as per the contract specifications," SAFEX said. There has been concern that excessive rains this season damaged much of the crop, impacting negatively on the quality.
This scenario - combined with expectations of a far smaller harvest overall this season compared to last and rand weakness - has helped push the first grade contracts to 29-month highs.