South Africa wheat farmers may switch to maize after drought

A severe drought may force South African wheat farmers to plant less this season, though some traders believe recent rains in the Western Cape could be enough to salvage the harvest. Many farmers may even opt to plant maize after a surge in prices could encourage many wheat farmers to switch to the staple grain, industry players said.

South African farmers have since late 2006 suffered one of the driest spells in years, taking a heavy toll on maize output for the 2006/07 crop about to be harvested. As wheat planting kicks off for 2007, traders feel the country's second biggest crop could suffer a similar fate after the dry weather that gripped the interior provinces. The Western Cape province, which is in its traditional rainy season and produced the bulk of the previous 2.11 million tonnes, is viewed as the only bright spot.

"I think the plantings, due to the higher maize prices, will be lower," a trader said, predicting a 10 percent reduction on 2006's 764,000 hectares. He said wheat folk may delay planting until September to monitor the maize market, which has levelled off after a phenomenal rally. Provided prices stay attractive, some may switch to maize which is planted in the latter part of the year. Most-traded July white maize futures topped 2,000 rand ($290) a tonne in March. The same contract closed at 1,630.2 rand ($ 235) in mid-May. Wheat futures for the same month fetched 2,200 rand.

"There'll be a slight increase in the Western Cape. The Free State province will be almost 20 percent down to 220,000 hectares," another trader said. "The guys still have quite a bit of time to plant (until June). The question is rain ... Soil moisture is already poor. But even if it was better, if farmers haven't had rain recently they will struggle. In the North West, the chances of planting there are almost nothing." Others said good rains in the wheat heartland should bode well for 2007.

Reuters