South African wheat fell, ending the longest run of advances in two years as the rand strengthened against the dollar, cutting the cost of imports and making them more attractive relative to local grains.
Wheat futures for delivery in September dropped for the first time in nine days, declining 0.2 per cent to 4,034 rand ($319) by the midday close of trading on the South African Futures Exchange in Johannesburg Tuesday.
The rand strengthened 0.3 per cent to 12.6474 per dollar by midday in Johannesburg. It has gained 0.9 per cent since dropping to a 2001 low against the dollar on 31 July.
“South Africa is a net importer of wheat, so the rand plays quite a big role,” Brink van Wyk, a trader at BVG (Pty) Ltd., said in an e-mailed response to questions.
While the nation is the sub-Saharan region’s largest grower of wheat after Ethiopia, it is a net importer of the cereal and the region’s biggest buyer after Nigeria and Sudan, US Department of Agriculture data shows.
South African growers are forecast to sow 478,300 hectares (1.2 million acres) with wheat in 2015, according to the nation’s Crop Estimates Committee. While that’s 0.4 per cent more than last season, it would be the second smallest area on record, the CEC said.
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