South African maize prices will top R2000 per ton in the next two months on the back of higher input costs and concerns over the US crop, traders and analysts said on Tuesday.

"There's a lot of uncertainty about the US crop. The crop was planted late and anything can happen it," said Andrew Fletcher, an analyst at brokerage firm Unigrain.

Excessively wet weather in the US has delayed maize plantings, with the latest data from that country's department of agriculture showing that just over 50 percent of the crop has been planted, well below the 71 percent planted at the same time a year ago.

Roan Erasmus, a trader at the Free State-based Vrystaat Kooperasie Beperk, said the higher input costs such as diesel, fertiliser and seeds would see prices above R2000 per ton around July and September this year.

Farming will not be profit

"At these prices, farming will not be profitable because of higher fertiliser and diesel prices. Farmers will push prices to above R2000 per ton in the next few months," he said.

According to grain farmers' representative body, Grain SA, production costs for various inputs for the coming season, starting in October, would rise by between 30 percent and 50 percent.

Grain SA noted that fertiliser, diesel, herbicides and interest on credit were among the major costs farmers would grapple with in the next few months.

"You could say at these levels, maize is cheap considering the increases in fertiliser prices," said Fletcher.

In its latest results presentation, agricultural services company Afgri said the soaring input costs would push the next season's costs to about R6000 per ton, producing between around four tons of maize per hectare.

Maize prices breached the R2000 per ton level

The last time maize prices breached the R2000 per ton level was early last year after an El-Nino-induced drought damaged the potential 10 million tons crop to just over seven million tons.

This season, however, the crop is expected to top 11 million tons, but for farmers to recoup production costs and keep up with international trends prices would remain high.

Maize for July delivery on the JSE's agricultural derivatives division ended 45 rand weaker at R1817 per ton and May maize fell by the same margin to R1800.

Short-term traders expect prices to bottom out at R1750 on the back of improving weather conditions in the US before picking up to peak at R2050 per ton in July.

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