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Johannesburg – South African maize futures finished Wednesday's session sharply lower on a combination of a firmer rand, weaker international wheat prices and a lower Chicago Board of Trade.
Thys Grobbelaar, an analyst with Senwes, said the firmer local unit against the US dollar "makes local maize stocks expensive to buy".
He added that the sharper pull-back in wheat prices was due to the anticipation of good rains in Russia following a drought in recent months.
Russia is one of the world's major wheat producing countries.
The October maize contract dropped R65 to R1 210 per ton, the December contract came off R64 to 1 251 rand and the March 2011 white maize contract shed R63 to 1 288 rand.
The October wheat contract dived R108 to 2 592 per ton and the December wheat contract plummeted R88 to R2 608. The March 2011 wheat contract tumbled R88 to R2 672.
At 12.37 the rand was bid 6.9602 to the dollar from 6.9340 at the same time on Tuesday.
"The CBOT came off on Tuesday due to the weather conditions this week which are favourable for harvesting," Grobbelaar said.
Dow Jones Newswires reports that the US corn futures fell for a second day in a row Tuesday, declining to $5 amid profit-taking ahead of a government report Thursday.
December corn ended down 12 3/4 cents, or 2.5%, to $5 per bushel and March corn closed down 12 3/4 cents to $5.12 1/2.
Traders say Thursday's quarterly grain stocks report is more likely to be bearish than bullish, which is why many are taking profits on recent gains. The approach of the end of the month and the quarter is adding to the profit-taking, they said.
After hitting a fresh two-year high on Friday, the market is down 4.2% the first two days of the week.
The correction has been "a little dose of reality" for farmers, who recognize prices above $5 are a good place to sell, said Jason Britt, president of Central State Commodities.
A slide in wheat prices added to the pressure Tuesday, as did forecasts calling for ideal harvest weather over the next several days.
The grain stocks report from the U.S. Department of Agriculture will detail total supplies in storage as of Sept. 1. There's "fear of a bigger number that would give us a little bit of a [supply] cushion," an analyst said of the report.
A trader said that given the losses so far this week, the market could be set up for a bounce if Thursday's report is neutral or supportive. The report won't reflect the 2010 crop, which has been disappointing thus far.
The trader said he isn't hearing reports of improved yields, although others, including Britt, said yields have improved as the harvest has moved north and west.
Funds sold an estimated 9 000 contracts Tuesday.
Britt said that a correction was inevitable in the market, but that the downside could remain limited as a "buy the dip" mentality persists.
Thys Grobbelaar, an analyst with Senwes, said the firmer local unit against the US dollar "makes local maize stocks expensive to buy".
He added that the sharper pull-back in wheat prices was due to the anticipation of good rains in Russia following a drought in recent months.
Russia is one of the world's major wheat producing countries.
The October maize contract dropped R65 to R1 210 per ton, the December contract came off R64 to 1 251 rand and the March 2011 white maize contract shed R63 to 1 288 rand.
The October wheat contract dived R108 to 2 592 per ton and the December wheat contract plummeted R88 to R2 608. The March 2011 wheat contract tumbled R88 to R2 672.
At 12.37 the rand was bid 6.9602 to the dollar from 6.9340 at the same time on Tuesday.
"The CBOT came off on Tuesday due to the weather conditions this week which are favourable for harvesting," Grobbelaar said.
Dow Jones Newswires reports that the US corn futures fell for a second day in a row Tuesday, declining to $5 amid profit-taking ahead of a government report Thursday.
December corn ended down 12 3/4 cents, or 2.5%, to $5 per bushel and March corn closed down 12 3/4 cents to $5.12 1/2.
Traders say Thursday's quarterly grain stocks report is more likely to be bearish than bullish, which is why many are taking profits on recent gains. The approach of the end of the month and the quarter is adding to the profit-taking, they said.
After hitting a fresh two-year high on Friday, the market is down 4.2% the first two days of the week.
The correction has been "a little dose of reality" for farmers, who recognize prices above $5 are a good place to sell, said Jason Britt, president of Central State Commodities.
A slide in wheat prices added to the pressure Tuesday, as did forecasts calling for ideal harvest weather over the next several days.
The grain stocks report from the U.S. Department of Agriculture will detail total supplies in storage as of Sept. 1. There's "fear of a bigger number that would give us a little bit of a [supply] cushion," an analyst said of the report.
A trader said that given the losses so far this week, the market could be set up for a bounce if Thursday's report is neutral or supportive. The report won't reflect the 2010 crop, which has been disappointing thus far.
The trader said he isn't hearing reports of improved yields, although others, including Britt, said yields have improved as the harvest has moved north and west.
Funds sold an estimated 9 000 contracts Tuesday.
Britt said that a correction was inevitable in the market, but that the downside could remain limited as a "buy the dip" mentality persists.
