Corn purchase prices in Ukraine are rising amid speculative rise in wheat prices

Sharp speculative rise in wheat prices caused by frosts in Russia and the USDA forecast to reduce world ending stocks in 2024/25 MG increased pressure on corn prices, which have no fundamental factors of support, as the harvest and stocks are expected to be quite high.

During the week, the purchase price of corn in Ukraine increased by 5-8 $/t to 170-175 $/t or 7600-7800 UAH/t with delivery to the Black sea ports amid rising prices for feed wheat by 10-12 $/t to 175-178 $/t or 7900-8000 UAH/t and strong export demand during the seasonal decline in supply.

In 2023/24 MY, Ukraine exported 24.07 mln tonnes of corn (25.7 mln tonnes last year), including 1.17 mln tonnes in May 1-13 (1.05 mln tonnes in the same period in 2023). In May, USDA experts raised the forecast of corn exports from Ukraine in 2023/24 MY from 24.5 mln tonnes to 26 mln tonnes, but lowered the forecast of the harvest in 2024/25 MY to 27 mln tonnes (31 mln tonnes in 2023/24 MY) and exports to 24 mln tonnes.

As of May 10, Ukraine planted corn on 2.84 mln ha, or 71% of the planned area (58% last year). Dry and warm weather will allow to complete the sowing in the optimal time, and early next week it will rain.

the July corn futures on the Chicago stock exchange on the data of the USDA report rose by 3.5%, but yesterday fell by 1% to 184 $/t (+5.4% for the month), while wheat futures for two sessions rose by 7.8%. December futures yesterday fell by 0.4% to 193,3 $/t (+4.7% for the month), but 5% higher than the quotes of the old crop amid the delay in sowing in the United States.

According to the NASS, in the United States on may 12, corn planted 49% of the planned area (60% last year, 54% on average for 5 years). Rains delayed sowing, but dry and warm weather in the next 8-10 days will speed up the work.

Experts USDA in the may report lowered the forecast of corn crop in Brazil from 124 to 122 million tons, while the local Agency CONAB recently raised its forecast by 0.672 to 111.64 million tons due to the increase in planted areas of corn second crop. The forecast of ending stocks was raised from 5.5 to 6.2 million tons (7 million tons last year), while the export estimate was left at 31 million tons (54.6 million tons last year). According to CONAB, as of May 12, the first crop corn was harvested on 68.1% of the area (72.4% last year).

According to the Buenos Aires Grain Exchange, as of May 8, Argentina has threshed 23.4% of the area, and dry weather will speed up the harvest in the near future.

The delay in corn supplies from Argentina increases the demand for Ukrainian corn. However, due to the heat wave in Brazil, the second crop corn may be available on the market in July, so Ukrainian producers should sell their stocks before then.

Tags: wheat, Ukraine, corn, prices