Purchase prices for corn in Ukraine are falling in line with the world market

The unexpected increase in the USDA January report of global corn production and stocks forecasts in 2023/24 MY led to the fall of stock prices, which increased the pressure on the purchase prices in Ukraine.

In December, amid stable operation of the Black Sea corridor and ports, the export demand for corn in Ukraine increased significantly, resulting in the purchase prices rising to 158-162 USD/t with delivery to the Black Sea ports and 165-170 USD/t with delivery to the Danube ports, and the hryvnia prices after the dollar appreciation to 38-38.2 UAH/$ reached 6550-6650 UAH/ton.

Last week, the hryvnia strengthened to 37.8-37.9 UAH/$, so traders adjusted hryvnia prices, and after the release of the USDA report, reduced foreign exchange prices by 3-5 $/t to 155-156 $/t (6250-6400 UAH/t) with delivery to the ports of the Black sea.

According to the State Customs Service, in 2023/24 MY Ukraine exported 20.563 mln tonnes of grains and pulses, including 2.097 mln tonnes in January 1-15, compared to 24.472 mln tonnes and 1.726 mln tonnes in the previous season. The exports of corn in the current season amounted to 11.014 mln tonnes, including 1.388 mln tonnes in January 1-15, so the USDA forecasted exports of 21 mln tonnes looks realistic. In 2022/23 MY, Ukraine exported 27.1 mln tonnes of corn due to active supplies to the EU. For the current season, the import forecast for the EU was lowered from 24.5 to 23.5 mln tonnes, which is almost the same as last year, but the blocking of Ukraine’s borders will not allow to increase the supplies by road.

According to the European Commission, in 2023/24 MY (as of January 7), the EU imported 9.03 mln tonnes of corn, down 43% compared to 15.84 mln tonnes in the previous season. Spain (3.95 mln tonnes), Italy (1.05 mln tonnes) and the Netherlands (1.04 mln tonnes) became the main importers of corn, while Ukraine (5.15 mln tonnes or 57% of the total imports) and Brazil (2.77 mln tonnes or 30.7%) are the largest suppliers of the grain. At the same time, the EU increased corn exports by 139% to 2.1 mln tonnes in the current season, including 1.39 mln tonnes sold by Romania.

Ukrainian corn remains the cheapest on the world market, and demand for it will remain high until March, when Argentine corn will enter the market. Moreover, U.S. farmers are in no hurry to sell their grain at low prices in anticipation of a seasonal decline in corn supplies from Brazil.

Tags: Ukraine, corn, prices