Bloomberg News

S. African Corn Declines for Second Day on Technical Sell Signal

March 07, 2013

South African corn fell for a second day on speculation that an increase to a more-than two-month high was overdone.

White corn for July delivery, the most active contract, dropped 1.1 percent to 2,196 rand ($240) a metric ton by the noon close in Johannesburg. The yellow variety for delivery in the same month declined 1.4 percent to 2,147 rand a ton.

On March 5, the 14-day relative strength index for white corn, also called maize, reached 71. A reading above 70 is a sign to technical analysts that the price is poised to drop.

“We have a bit of a correction after the long highs we experienced in the past days,” Andrew Fletcher, an independent trader, said by phone from Kroonstad in the Free State.

Concern about a lack of rain over the past two weeks saw prices climbing to the highest since Dec. 6 on March 5.

South Africa is the continent’s biggest producer of corn. White corn is a staple food, while the yellow variety is mainly used as animal feed.

Wheat for May delivery declined 0.9 percent to 3,372 rand a ton.

To contact the reporter on this story: Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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