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February 01, 2011

Maize glut may push South African farmers to planting soy, sunflower

by Brian Latham

South African farmers may have planted a record amount of soybeans and sunflower seeds after prices surged, encouraging producers to switch away from corn, the government’s Crop Estimates Committee said.

Farmers may have planted an estimated 575,200 hectares (1.42 million acres) of sunflower seeds, up from 397,700 hectares a year ago, the Pretoria-based committee said in a statement. Land used for soy probably increased 41 percent to 438,000 hectares while the total corn area, including both white and yellow corn, may fall 8 percent to 2.52 million hectares

“Soy and sunflowers took land used by corn,” Rodney Dredge, chief director of economic and statistics services at the Department of Agriculture, said today by phone. “The increase in the soy and sunflower crops, and the drop in the corn crop, is probably a result of prices.”

The price of sunflower gained 47 percent over the past year on the South African Futures Exchange, based in Johannesburg, while soy increased 38 percent. White and yellow corn added 23 percent and 22 percent respectively over the past 12 months. South Africa has a corn surplus of about 4.5 million metric tons, according to a November estimate, which may have discouraged planting of the crops.

White corn for March delivery, the most active contract on the exchange, climbed 2 percent to 1,463 rand ($207) a metric ton by the 12 p.m. close of trading today. Yellow corn for July delivery advanced 1.4 percent to 1,580 rand a ton, sunflower seeds for delivery in May gained 0.5 percent to 4,330 rand a ton and soy for May delivery fell 2 percent to 3,544 rand a ton.

While land allocated for soy and sunflowers has increased, crop yields may be low because of unusually heavy rains and flooding this month, Dredge said.

“The crop planted before November is looking pretty healthy, but the post-November plantings may not yield as well,” Dredge said, adding that the estimates by the committee are preliminary and may still change once aerial assessments have been done.

Soy prices will probably remain at “export parity,” Riaan Gerber, a trader at Pretoria-based Derived Market Investment, said, referring to a level where South African prices are considered competitive to other markets. Sunflower prices “may come under some pressure,” he said, adding that acreages for both crops may still exceed the committee’s latest estimates.

South Africa’s summer farming season mainly runs from October to April. Corn, soy, sunflower, dry beans, sorghum and groundnuts are grown in summer. South Africa is the continent’s biggest producer of corn, the country’s staple food.


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