Good rains boost SA's summer grain crop prospects

This week, Absa AgriBusiness analyses several market dynamics and shares its expectations for local grain and oilseed prices over the coming months.

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Summer crop prices remain significantly higher year-on-year (y/y) due to drought-induced production cuts and strong local and regional demand, which have driven SAFEX maize prices to record highs.

Despite the severe heat experienced over large parts of South Africa at the end of November, production outlooks remain positive thanks to the rains received over the past few weeks, boosting expectations for a good crop in the current season.

MAIZE

Chicago Board of Trade (CBOT) maize prices followed an increasing trend since the beginning of 2025, increasing by 5,7% month-on-month (see Graph 1), underpinned by hot and dry weather in Argentina, which is one of the world's top three maize exporters.

Argentina experienced a prolonged dry spell in December, heightening concerns over this major producer's yields.

In its January World Agricultural Supply and Demand Estimates report, the US Department of Agriculture said US maize production had fallen by 1,8%, leading to lower stock levels. This reduction was attributed to drier production conditions towards the end of the growing season, which also supported CBOT maize prices.

SAFEX WHITE MAIZE HAS BEEN TRADING AT AN AVERAGE PREMIUM OF R1 280/T OVER YELLOW MAIZE OVER THE PAST MONTH