Johannesburg - South African wheat futures gained to the highest level in more than three months as the rand weakened against the dollar, making imports more expensive and increasing demand for locally produced cereal.
Wheat for delivery in July, the most active contract, rose for a fifth day, adding 0.2 percent to 3,575 rand ($372) a metric ton, the highest since February 11, by the midday close on the South African Futures Exchange.
The rand traded at 9.5941 per dollar by noon.
That’s within 10 cents of 9.6948 reached on May 23, the weakest level since March 30, 2009.
“This is as a result of the weaker rand,” Lindy van Blommestein, a trader at Johannesburg-based Farmwise Grains, said by phone.
“Wheat prices will move up as the rand is very volatile.”
South Africa is sub-Saharan Africa’s largest producer of the grain after Ethiopia and the region’s biggest importer after Nigeria and Sudan, according to US Department of Agriculture data.
The nation produced 1.87 million tons in 2012, 7 percent less than a year earlier, the Crop Estimates Committee said on May 7.
White corn for delivery in the same month rose 0.2 percent to 2,201 rand a ton, while the yellow variety gained 0.4 percent to 2,176 rand a ton. - Bloomberg News