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Wheat at 17-month high, rand boosts import costs

Johannesburg - Wheat climbed to a 17-month high as a weaker rand made inbound shipments more expensive for SA, which is a net importer of the grain.

Wheat futures for delivery in December rose as much as 0.8% to R4 111 a metric ton, the highest since March 2014.

The rand weakened to the lowest level in almost 14 years against the dollar.

While the SA is the sub-Saharan region’s largest grower of wheat after Ethiopia, it is a net importer of the grain, US Department of Agriculture data show.

Farmers are forecast to plant the second-smallest area ever, according to the Crop Estimates Committee.

The rand has a direct impact on wheat prices because SA imports about half of its requirements, Brink van Wyk, a trader at BVG, said by email.

Wheat was up 0.5% at  R4 100 by 12:09 on the JSE Futures Exchange. Futures gained 2.5% this year after rebounding from a five-month low in April.

Growers are expected to sow 478 300 hectares with wheat in 2015, according to the CEC.

While that’s 0.4% more than last season, it would be the second-smallest area on record, it said. The committee will release its first production forecast and revised area data on August 26.

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