Fall-off in maize futures trades
Increase in open interest follows expected bumper crop driving up number of contracts traded on JSE
The number of maize futures contracts traded on the JSE has fallen on expectations of a bumper maize crop. During the drought, the increased demand by traders for futures pushed futures prices higher as they tried to cover losses because of an uncertain yield outcome. "The main driver [futures contracts traded] was on the back of the anticipated bumper crop, but we are starting to see an uptick in open interest, which translates to market participants starting to build up their positions," said JSE head of commodities Raphael Karuaihe. The excess maize supply would not exert a negative influence on the market, but would ensure a sustainable derivatives market, Karuaihe said. Karuaihe said that supply-and-demand dynamics in the commodities market played an essential role in price determination, which resulted in grain prices, particularly maize, also hitting record highs and would result in the surplus production exerting a downward pressure on grain prices. Independent analyst Andre...
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