Growth of corn prices in Ukraine limits the fall in world prices

During the week, corn prices in Ukraine rose amid rising dollar and export demand, as well as reduced supply from producers.

Rumors about China’s cancellation of corn contracts, which last week led to a drop in prices, were not confirmed, and purchase prices in the ports of the Black Sea increased by 150-200 UAH/t to 6700-6900 UAH/t or 155-157 USD/t. The President of the Ukrainian Grain Association M. Gorbachev explained that China changes the terms of deliveries due to the shortage of grain storage facilities, but does not cancel the previously concluded agreements.

According to the State Customs Service, China imported 1.7 mln tons of corn in March, which is 34.2% down from February and 22% down from March’s level of 22%. The decline in imports is due to lower consumption by local processors and increased supply of domestic crops. In general, in October-March China imported 18.5 mln tonnes of corn compared to 9.7 mln tonnes in the same period of the previous season.

In 2023/24 MY Ukraine exported 21.17 mln tonnes of corn (out of 24.5 mln tonnes forecasted by USDA), down 10.4% compared to last year. In April 1-17, the country exported 2.4 mln tonnes of the grain compared to 1 mln tonnes in the same period last year.

May Futures for corn on the Chicago stock exchange this week fell by 2% to 168,1 $/t (-2.8% for the month) amid falling oil prices and improved weather in the United States.

In 2023/24 MY, the U.S. exported 28.68 mln tonnes of corn, up 33.74% compared to last year, so the USDA forecasted 53.3 mln tonnes will be achieved if the exports will be 1.2 mln tonnes per week till the end of the season.

According to the NASS, on April 12, corn in the United States planted 8% of the planned area (5% on average for 5 years), and warm weather and rain will accelerate sowing next week.

World prices support data on the condition of corn crops in Brazil and Argentina. Experts FAS USDA has reduced the forecast of corn crop in Argentina in 2023/24 MG from 57 to 51 million tons due to dry weather in some areas and outbreaks of disease. It is expected that in 2024/25 MY from 6 million hectares will be harvested 48 million tons of corn, as farmers will switch from corn to soybeans, and the sowing area will be the smallest in 6 years.

In Brazil, in the main regions of growing corn of the second crop on the eve of the dry season, the deficit of precipitation remains.

IGC experts lowered the forecast of world corn production in 2024/25 MY by 7 mln tonnes to 1226 mln tonnes (1223 mln tonnes in 2023/24 MY) due to the decrease of the US harvest. According to the forecast, the world ending stocks will increase from 289 million tons in 2023/24 MY to 291 million tons in 2024/25 MY.

Tags: Ukraine, corn, Brazil, prices, USA, Argentina