Sabotage of ship inspections by Russian inspectors limits the increase in corn prices

According to Ukrinform, another 9 vessels with 390,000 tons of agricultural products for African, Asian and European countries left the ports of Odesa as part of the grain initiative, and another 22 vessels are in the process of loading 860,000 tons of agricultural products. 3 vessels are heading to Ukraine through the grain corridor to load 93,000 tons of products. And there are already 95 vessels in the queue in the Bosphorus, compared to 86 a week ago and 75 two weeks ago, and some have been waiting for permission for more than a month.

Representatives of the Russian Federation as part of the JCC continue to artificially delay the inspection of vessels, which increases the losses of carriers and limits purchase prices in Ukraine.

Against the background of increased demand on the eve of the New Year holidays, the purchase prices for corn in the ports of Ukraine rose to $205-208/t or UAH 7,700-7,800/t, however, due to the delay of ships in the ports, queues of motor vehicles formed for 1-2 days.

Farmers continue to harvest corn, so the number of offers is still limited. The predicted increase in temperature to +4…+9 ^o C will speed up harvesting in the absence of precipitation.

According to the Ministry of Agriculture, as of December 23, 20.2 million tons of corn were threshed from 3.1 million hectares or 75% of the area with a yield of 6.42 tons/ha. In the current season, Ukraine exported 11.8 million tons of corn from the USDA forecast of 17.5 million tons (10.3 million tons last year on this date), in particular, in December – 2.23 million tons (4.2 million tons last year), which significantly higher than the figure for November.

March corn futures in Chicago rose 1.3% after the weekend to $265.7/t, while January Black Sea corn futures settled at $253.5/t.

Demand prices for domestic corn from European buyers against the background of market saturation and approaching holidays remain at the level of $205-210/t DAP – Poland and $210-220/t DAP – Romania and Hungary.

The trade and analytical company Barva Invest said that “due to sabotage by Russian inspectors, Ukraine exports 4-5 million tons of corn less than planned, because 3-4 inspections per day are catastrophically small. The situation could be improved by the involvement of Mykolaiv port in the grain initiative, but the priority should be the stable work of the SCC. Given the seasonality and forecasts of good corn harvests in South America, the prospects for Ukrainian corn are quite pessimistic. Farmers are now selling it at a loss in order to free up funds, and in the next season they will reduce the area sown under grain in favor of oil crops – sunflower, soybeans and rapeseed. Accordingly, the processing and export of corn from Ukraine will decrease in 2023/24.”

Tags: Ukraine, corn, prices