Corn prices in Ukraine have started to fall, so will farmers have time to sell the grain profitably?

After Turkey introduced an additional quota for the import of 1 million tons of corn with a 5% duty, export prices for corn in Ukraine reached the maximum level of the season at $230-232/ton. However, under the pressure of falling stock quotes and increasing offers, since Monday corn prices in Ukrainian Black Sea ports have decreased by $2-4/ton to $227-230/ton or UAH 10,600-10,750/ton. Some companies bought corn at elevators at a price of UAH 10,100-10,300/ton EXW, since after the shutdown of the electronic system of Ukrzaliznytsia, shipments to the ports stopped, which increased demand for CRT.

Next week, negative news from the US may appear, which will worsen forecasts for the development of the global economy and lead to a fall in commodity prices, so farmers should accelerate the sales of corn at high prices.

Corn exports from Ukraine for March 1-20 amounted to 1.5 million tons (which corresponds to the same figure in March 2024), and in total for the season reached 16.1 million tons (17.6 million tons on this date last year) out of the projected 22 million tons.

Analysts of the agricultural cooperative PUSK, created within the framework of the All-Ukrainian Agrarian Council, note that Ukrainian corn remains the most expensive on the world market. For example, Ukraine offers corn to the Spanish market at a price of $257-260/t, while Argentina offers it at $245-248/t. As a result, the main buyers from the EU have reduced purchases in anticipation of a new harvest from Argentina.

After Turkey exhausts its quota, corn prices in Ukraine may fall to $215-220/t in April, which will correspond to seasonal patterns, so farmers should accelerate the sale of the crop.

June corn futures on the Paris Stock Exchange fell by 1.4% to €213.75/t or $230.5/t (-2.9% per month), and no increase in demand for Ukrainian corn from EU countries is expected yet.

May corn futures on the CBOT exchange in Chicago fell 1.5% yesterday to $177.7/t (-6.4% month-on-month) amid a decrease in ethanol processing and expectations of tariffs starting April 2. It is worth noting that the basis price for corn in the US, at which grain is purchased from farmers, is currently $164/t. December futures are trading at $175/t, which is almost equal to the price level for the old crop. At the same time, in Ukraine, forward prices for the new crop are $200-205/t with delivery to the port, which is 12-15% lower than the current price.

According to the EIA’s weekly report, during March 15-21, ethanol production in the United States decreased by 5% to 1.053 million barrels/day, and inventories increased by 775 thousand barrels to 27.35 million barrels.

On Monday, the USDA will release its first forecast for US corn plantings and a report on stocks, which will have a strong impact on quotes.

In Brazil, the weather remains favorable for planting the second crop of corn (which is mainly exported), but corn prices have increased by 23% since the beginning of the year to $263/t (90 reais or $15.8 per 60-kg bag) against the background of low stocks and high demand from ethanol and meat producers. Therefore, corn prices may resume growth in July-August, especially if weather conditions worsen.

Tags: Ukraine, corn, prices