Ukraine once again becomes key to the EU corn market

The Ukrainian corn market is recovering under the influence of renewed purchases from EU countries, which are entering the market in search of stable volumes. The world market is at risk: limited stocks and a decrease in the area sown by leading producers are creating a potential deficit. Against this background, Ukraine remains a strategic source of supply for Europe. This was reported by the analytical department of the agricultural cooperative PUSK, established within the framework of the All-Ukrainian Agrarian Council (VAR).

“The main driver in the market is the demand for Ukrainian corn from the EU, in particular Greece, Italy, Spain and the Netherlands. This has enabled the market to grow and reach price levels of $225–226/t, which can now be considered market balance,” analysts note. At the same time, the fundamental situation in the global corn market remains tense. The balance of production and consumption remains practically equal, which means there are no excess stocks.

“The world corn market is balanced today — virtually everything that is produced is consumed immediately. Stocks are formed minimally, and this creates a very sensitive system to any changes in production. If there is even a slight reduction in the harvest, it will immediately lead to a shortage. Buyers understand this, which is why they are starting to act in advance. In fact, we are already seeing signs of such behavior,” the PUSK explains.

The key risk factor for the new season is the reduction in sown areas in leading producing countries. In particular, Romania and France plan to reduce the area under corn, and there are similar expectations for the USA. Against this background, Ukraine remains a critically important supplier for Europe.

“European processors are seriously concerned about the situation with the future harvest today. They are actively interested in how much corn will be sown in Ukraine and whether there will be a reduction. After all, the EU is a net importer of this crop, and to a large extent depends on supplies from Ukraine and the USA. In fact, up to 75–80% of the market is covered by these two countries. If Ukraine also starts to reduce production, this could create a serious deficit for Europe,” analysts emphasize.

There is currently no trend in Ukraine to reduce areas — on the contrary, their slight expansion by 300–500 thousand hectares is expected. At the same time, weather conditions will remain the decisive factor.

“Indicatives are already forming on the new crop market at the level of $218–220/t CPT, while individual forward contracts were concluded at $223–224/t with delivery in October–November. This indicates growing concerns among traders about a possible deficit. In the longer term, the market shows potential for growth. According to estimates, the average price in the new season may reach $240–245/t CPT, although this level will likely be realized closer to the second half of the marketing year,” the PUSK predicts.

However, analysts do not recommend rushing into forward sales, given the high level of uncertainty regarding the harvest and weather conditions.

Tags: Ukraine, corn, EU