Purchase prices for corn in Ukraine are rising on forecasts of a reduced harvest and a shortage of supply

Export prices for corn in Ukraine are rising in line with global quotations amid forecasts of a reduced harvest and limited supply from producers.

the December corn futures on the Chicago stock exchange on Monday fell to the lowest since 2020 level, but since then rose by 3.8% to 161,7 $/t (+1.5% for the month) on forecasts of heat in the United States and a possible reduction in harvest in Ukraine, Argentina and Brazil.

According to Reuters, in Argentina in the current season, farmers will reduce the area under corn in favor of soybeans, which will be planted the largest area in the last 10 years. The refusal to grow corn is explained by the fact that the 2023/24 crop was affected by the plague of insect leafhoppers, while current rain forecasts are more favorable for soybeans than corn. Rosario Grain Exchange analysts believe that under the pressure of these factors, the corn area in 2024/25 MY may decrease by 17-21% or 2 mln ha in favor of soybeans.

Dry and hot weather in Brazil delays the sowing of corn and soybeans of the first harvest, which will later delay the sowing of corn of the second harvest. In August, the country exported 6.063 million tons of corn, which is 35.25% lower than in 2023 and is the lowest August figure since 2020 and the second lowest in the last 6 years. Farmers are not in a hurry to sell corn at low prices, given the unfavorable conditions for planting the new crop.

November corn futures on the Paris stock exchange for the week rose by 2.3% to 202,75 €/t (which corresponds to the level of last month), almost not responding to the next forecasts of a decrease in the EU harvest.

In Ukraine, 457.5 thousand tons of corn were harvested from 4 million hectares or 2% of the area, with a yield of 5.7 tons per hectare.

The purchase price of corn for the week increased by $5/t to 175-180 $/t or 8100-8300 UAH/t with delivery to the Black Sea ports.

According to the State Customs Service, in 2024/25 MY (as of September 4), Ukraine exported 2.288 mln tonnes of corn (2.16 mln tonnes in the same period last year), but in August the exports slowed down due to very low stocks of old crop.

At the beginning of the season, traders will keep corn purchase prices high to buy the necessary volumes, but later on, demand for Ukrainian corn may decline as competition with cheaper US grain intensifies.

Tags: Ukraine, corn, prices