South African white corn futures dropped the most in two years on the outlook for rainfall to boost the crop.
The contract for March delivery declined 7%, or 250 rand ($23.24), to 3,320 rand a metric ton by the midday close on the South African Futures Exchange in Johannesburg. That was the biggest decline for white corn futures since March 7, 2012, based on data compiled by Bloomberg. The yellow variety for delivery in July dropped 1.6% to 2,220 rand a ton.
The town of Welkom in the Free State province, the region which accounts for 45% of the nations’s white corn, will have a 30% to 80% possibility of rain from today until March 20, according to South African Weather Service website.
“We’ve got quite a lot of rain coming through in growing regions and that eases concerns about the crop,” Benjamin Swanepoel, an independent trader, said by phone in Johannesburg. “With good rain, this might mean that the crop will be bigger than what the Crop Estimates Committee have said.”
Local farmers may produce 12.4 million tons of corn this season, the committee said on Feb. 27. The nation produced 12.8 million tons in 2010, the biggest crop since 1982.
South Africa is the continent’s largest producer of corn. White corn is the source for a meal that’s a staple food in the country, while the yellow variety is mainly fed to animals.
Wheat for delivery in May decreased 1% to 4,013 rand a ton, after gaining for five straight days in Johannesburg. South Africa is a net wheat importer and sub-Saharan Africa’s largest grower of the grain after Ethiopia, according to the U.S. Department of Agriculture.