The delay in harvesting corn in Ukraine will lead to a sharp rise in prices in the near future

The probability that part of the corn crop in Ukraine will remain in the fields for the winter is increasing. Heavy autumn rains slowed harvesting and increased corn moisture to 28-32%, which, against the backdrop of high drying costs and low corn prices, makes harvesting impractical. The snow that fell in mid-November stopped field work altogether, and similar weather will continue for at least another two weeks.

In Ukraine, as of November 18, 12.3 million tons of corn were threshed from 2.1 million hectares or 50% of the area with a yield of 5.81 tons/ha, while local analysts estimated the harvest at 27-28 million tons, and the USDA at 31 .5 million tons. Corn can be harvested in winter or early spring, but under conditions of frost and the absence of snow in the fields. However, Ukrainian farmers have not yet left such large volumes of harvest in the fields for the winter, so it is difficult to estimate possible losses now.

Traders resumed the purchase of corn in the Black Sea ports of Ukraine at a price of UAH 7,500-7,600/t or $175-205/t, but the pace of deliveries remains low, given the cost of delivery to the ports in the range of UAH 1,500-2,000/t and the drying cost of 2,000- UAH 2,500/t.

Thanks to high transitional stocks in the current season, as of November 21, corn exports amounted to 8.6 million tons compared to 4.6 million tons a year ago. Shortage of new harvest offers will lead to instability of deliveries to ports and increase in purchase prices in the near future.

Global corn prices remain under pressure from falling oil prices and commodity demand due to the global economic slowdown, but could soon resume growth on forecasts of lower production in Ukraine.

In the November report, IGC experts left the forecast of world corn production in 2022/23 at the level of 1.166 billion tons (1.218 billion tons last year), while the estimate of final stocks was reduced to 257.2 (257.7; 280.7) million tons, in particular for Argentina – up to 2.2 (2.8; 3.6) million tons.

In the US, corn was harvested on 96% of the area (90% on average over 5 years), and export inspections for the week decreased by 7% to 495 thousand tons, while total exports for the season reached 5.48 million tons, which is 2.35 million tons is inferior to last year’s figure.

Against this background, December corn futures yesterday fell by 1.3% to $259.6/t (-3.6% for the month).

Brazil exported 3.4 million tons of corn between November 1-21, which is 41.6% higher than in October and continues to lower prices for American and Ukrainian corn.

March futures for corn on the exchange in Paris fell by 3.6% to 306.75 €/t during the week on expectations of increased supplies from Ukraine. Following them, demand prices for Ukrainian corn for delivery to the border with Poland, Romania, Slovakia and Hungary fell to $230-240/t, and for delivery to the ports of Romania – to $265-270/t.

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