South African Corn Gains After Crop Forecast is Cut COMMODITIES MARKETPLACE By Bloomberg
Posted on: Thursday, 23 February 2006, 12:00 CST
By Mkhululi Mancotywa and Stewart Bailey
Corn prices in South Africa, the biggest producer of the grain in Africa, rose on Wednesday after the government cut its forecast for the harvest this year to the lowest in a decade as plantings were slashed.
The country is expected to reap 6.21 million metric tons of corn, down from 11.45 million tons, an 11-year high, in 2005, the government's committee on crop estimates said Tuesday in the first forecast for this season. In 1996, the country reaped 4.41 million tons, according to committee data.
White corn for delivery in March rose 41 rand to close at 1,000 rand a metric ton on the South African Futures Exchange in Johannesburg. Meal made from white corn is South Africa's staple food. Yellow corn for March delivery, the most active contract, gained 19 rand to 969 rand a ton. Gold erased a loss from early Wednesday, ending the day unchanged when the rise in U.S. consumer prices lifted the appeal of the metal as a hedge against inflation. Gold fell earlier Wednesday after the World Gold Council in London said that global demand declined 15 percent in the fourth quarter, when high prices discouraged bullion purchases by jewelers and investors. The council reported that demand fell to 943 metric tons from 1,108 tons a year earlier.
David Gornall, head of foreign exchange and bullion at Natexis Commodity Markets in London, said: "There isn't a lot of physical buying going on at the moment. There is a perception in the market that gold prices are overstretched."
Gold futures for April delivery closed at $556.60 an ounce on the New York Mercantile Exchange. Crude oil fell on speculation that surging U.S. supplies are sufficient to make up for disrupted Nigerian shipments. Oil inventories rose by an estimated 1.2 million barrels last week. Almost a fifth of Nigeria's output remains shut after rebels attacked an export terminal last weekend.
Crude oil for April delivery fell $1.73 to $61.01 a barrel on the New York Mercantile Exchange.
Source: International Herald Tribune
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