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Maize prices lower on CBOT, strong rand

Johannesburg – South African white maize prices ended lower on Monday on the back of a weak finish on the Chicago Board of Trade (CBOT) on Friday and a stronger rand.

Weather concerns also weighed on local prices, dealers said.

The December maize contract shed R13 to R1 264 per ton, the March 2011 contract slid R10 to R1 307 and the July 2011 white maize contract lost six rand to R1 352, according to I-Net Bridge preliminary data.

Among local wheat futures, the December contract was down R17 to R2 663 per ton, the March wheat contract gave up seven rand to close at R2 727 and the July 2011 wheat contract was unchanged at R2 839.
 
At 12:00 when the local market closed, the rand was bid 6.8761 to the dollar from 6.9677 when the local market closed on Friday.

Meanwhile, Dow Jones Newswires reported that US corn futures stumbled Friday, sliding into negative territory for the week on bearish demand outlooks and spillover weakness from soybeans.

Chicago Board of Trade December corn ended 4 1/4 cents, or 0.8%, lower at $5.60 a bushel. Speculative fund selling was estimated at 6 000 lots.

The price of corn has fallen off, officially erasing last week's run to 2-year highs as corn exports tapered off since prices surged, said Tim Hannagan, analyst with P.F.G. Best in Chicago.

Corn's high prices struck a nerve, with traders taking in the fact that recent price spikes had effectively rationed export demand, Hannagan said.

Meanwhile, analysts were watching the weekly settlement in CBOT corn for a signal on the market's direction. Corn's settlement below last Friday's closing price of $5.63 a bushel in most-active December corn indicates "the bull market has run out of steam for now," AgriVisor analyst Dale Durchholz said.
 
The December contract ended down 3 cents for the week.

Futures last week reached a two-year high on supply fears before backpedaling. Markets closed lower every day this week, except Wednesday.

Traders initially anticipated a price increase after futures tumbled Thursday on lower-than-expected weekly U.S. corn export sales. Other areas of demand also appeared to be strong, with weekly data issued Wednesday by US Department of Agriculture showing U.S. broiler egg and chick placements were up about 6% from a year ago, a sign that animal producers had not cut back on purchases of corn for feed.

USDA on Friday said exporters had struck deals to sell 120 000 tons of U.S. corn to South Korea.

Early gains were quickly absorbed by the market, as signs of weakness in soybeans, the upside leader in grain commodities this week and the stabilization of the U.S. dollar provided little support to sustain upside price movement, Hannagan said.

However, downside pressure was limited by fears USDA will further tighten the U.S. corn balance sheet with lower end stocks and production in their November 9 crop report, Hannagan added.

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